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Dieselgate: European VW clients will not get damages

16 June 2017

European Union regulators, who have been struggling for months to make Volkswagen AG compensate owners of rigged diesel cars, said they reached an agreement with the carmaker to provide two years of repairs that are tantamount to an “extra guarantee.”

Under the plan, Volkswagen will promise to resolve issues that might arise up to 24 months after diesel cars have been fixed, but still won’t make financial payouts. In talks with VW, the EU has unsuccessfully sought to make sure customers in Europe are treated like car owners in the U.S., who can receive as much as $10,000.

VW is facing thousands of lawsuits from disgruntled investors and customers worldwide after admitting that it rigged 11 million diesel vehicles to cheat on emissions tests. The scandal has cost Wolfsburg, Germany-based Volkswagen 22.6 billion euros ($25.5 billion) so far, largely to pay for U.S. fines and settlements. The company has been able to avoid paying European car owners, instead offering vehicle repairs, much to the displeasure of consumers and politicians, according to Bloomberg.

European Commission spokesman Christian Wigand, in a phone interview Wednesday, said EU Consumer Affairs Commissioner Vera Jourova sees the “extra guarantee” as a “positive step.” Her office will brief consumer protection agencies about the agreement on Thursday.

The carmaker said it had reached reached a “consensus” with the EU on the issue.

VW is offering a “trust-building measure” under which it will repair “certain parts” of the car that may be damaged by software updates required to fix the underlying diesel emissions cheating.

Whether it’s called a deal or a consensus, European consumer group BEUC said it doesn’t go beyond VW’s existing legal obligations. The company must ensure that software updates wouldn’t hurt fuel consumption or performance, and repair the car if the initial fix went wrong.

“This looks more like a window dressing exercise of VW to avoid compensating consumers,” the group’s spokesman, Johannes Kleis, said. “It is sad that Volkswagen seems unreceptive to the fact that millions of consumers have been misled and deserve compensation in Europe.”

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