The proposed settlement between federal and state regulators and Volkswagen regarding the company’s cheating on emissions standards in nearly 500,000 diesel vehicles details how affected American consumers would be made whole. Plus, it spells out the ways in which the German-based company must compensate for the environmental damage done by the excess pollutants that VW diesels spewed into the atmosphere. Now out for public review, the settlement addresses many of the concerns raised by Consumer Reports, but it can be improved.

Consumers Union, the policy and mobilization arm of Consumer Reports, today submitted formal comments to the U.S. Department of Justice supporting the settlement, while urging regulators to consider and address several points before finalizing the agreement, including:

  • While the buyback and lease termination options are entirely justified, they should be revised to increase buyback values and ensure that all consumers who leased their vehicles—including those who used a company other than the VW Credit service—do not incur any recall-related costs.
  • Consumers who receive an emissions fix—if one is approved by regulators—should have a period of time to return a modified car if they are unsatisfied with how it operates. This would give them a second chance to take the buyback or lease termination. It would help VW get more consumers to participate in the recall by protecting them from being stuck with a car that has worse performance or fuel economy than it did before.​
  • Any approved emissions modification program should clearly inform consumers of buyback or lease termination alternatives and better protect them from improper liability waivers or releases.
  • The recall rate target of 85 percent by June 2019 is appropriately ambitious. The target is backed by substantial penalties if the company falls short, but it should include earlier, staggered targets to motivate quicker action.
  • Consumers who sold a vehicle between September and June can split the owner restitution payment approximately 50/50 with the new owner, but they have only 45 days to identify themselves—a timeline that should be extended.
  • Requirements for salvage, resale, and export are generally appropriate, but labeling and disclosure obligations should extend to consumers abroad.
  • Regulators have broad oversight tools, but certain penalties should be stronger.
  • The zero-emission vehicle investment will help pay for the harm done, but it should not be fulfilled through government incentives or excess public outreach.
  • VW must completely offset any past, present, and future emissions through the mitigation trust.
     

Read the full comments submitted by Consumers Union (PDF).