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Dieselgate: Volkswagen asked to explain lack of Aussie compensation

By Barry Park, 09 Feb 2017 Industry

Dieselgate: Volkswagen asked to explain lack of Aussie compensation

Consumer advocates have joined forces to ask Volkswagen to explain why Australian owners miss out on US-style Dieselgate payouts.

AUSTRALIA’S consumer advocate has joined its US counterpart to savage Volkswagen Australia over its handling of the Dieselgate scandal – and the lack of compensation payouts.

Choice and the US-based Consumer Reports – both known for their no-holds-barred approach to fighting for consumer rights – have jointly written to Volkswagen Group’s global chief executive, Matthias Meuller, asking why Australian owners are being treated differently to those in the US.

More than 600,000 cars are affected in the US, with Volkswagen Group offering to either buy back or compensate owners via deals struck with the US courts running into the billions of dollars.

About 100,000 Australian owners have Volkswagen, Skoda, Audi and even Porsche-badged cars affected by the Dieselgate scandal. In most instances, the vehicles will have their firmware updated to remove the defeat device, although some will also need modified parts fitted to the engine.

“Last year, Volkswagen agreed to a civil settlement giving affected US consumers the choice to have their car repaired or bought back by the company,” the joint letter says.

“The company would go on to plead guilty in the US to criminal charges and agree to pay $US4.3 billion ($A5.6 billion) in criminal and civil penalties. Overall, Volkswagen is demonstrating in the United States that it plans to make US consumers whole.”

However, it says the carmaker’s approach in Australia “has been to avoid, confuse, and deny”.

“In court, the company expressly has denied installing any ‘defeat devices’ in Australian vehicles, yet has admitted that the vehicles operate in a testing mode and a non-testing mode,” the letter says.

“Moreover, Volkswagen is running a recall in Australia to deal with what the company obliquely calls ‘the emissions situation’, and has announced that the only recourse for Australian consumers is to accept a technical fix to deal with the “deviations” in emissions between tests and normal road use.

“We are surprised and disappointed that Volkswagen is treating Australian consumers so differently from those in the United States.”

It urged Volkswagen to “come clean” on admitting the cheat devices were installed on cars sold here, and to “act promptly to properly compensate Australian consumers”.

In Australia, Volkswagen is fighting two separate class actions seeking compensation, and fighting allegations levelled against it by the consumer watchdog that it breached advertising laws by installing the firmware in cars sold here – claims it all denies.

"It is concerning that Choice has no grasp of this issue. Volkswagen Group Australia is in constructive dialogue with the Australian Competition and Consumer Commission and representatives of the Australian government. The matter is before the Federal Court. Choice's belated buy-in adds no value,” the carmaker said in a statement issued in response to the letter.

"Volkswagen Group Australia believes there is no legal basis for the cases against it in Australia,” it said.

“As Choice should be aware, US emission regulations are unique in the world in that they are based on nitrous oxide. Australia's regulations, like those of the more than 70 countries that subscribe to the EU emissions regime, are based on lowering fuel consumption and carbon monoxide.”

Volkswagen Australia said all its new vehicles complied with Australia's Euro 5 standard, or the even more stringent Euro 6 regulations.