Picture: ISTOCK
Picture: ISTOCK

Washington — Volkswagen (VW) is paying owners of polluting diesel-powered vehicles up to $1,000 in additional payments to settle state lawsuits in Vermont, US, the state’s attorney-general said on Wednesday.

VW agreed to a $6.5m settlement with Vermont to resolve allegations of false advertising claims. Under the settlement, VW agreed to pay owners in the state up to $1,000 each for vehicles covered under the settlement.

Vermont and Arizona, which settled similar claims last month, are the only two states in which consumers will receive restitution payments as a result of a state-enforcement action. Under court settlements, VW owners previously received between $5,100 and $17,000 in compensation for having polluting vehicles fixed or selling them back to the car maker.

In 2016, VW reached a $603m consumer fraud settlement with 44 US states. Since then, it has struck settlements with five other states — including Vermont — worth more than $120m. The only state with a pending consumer fraud action is New Mexico.

"Vermonters expect and deserve truth in advertising — especially when it comes to making decisions involving environmental impacts," said attorney-general Thomas Donovan. Vermont owners will receive a total of $2.9m in direct consumer restitution and VW will also pay $3.6m into the state’s general fund.

In the Arizona settlement announced in May, VW agreed to pay $10.5m for direct consumer payments and $20m into the state’s general fund, to be used toward its education funding shortage. Arizona attorney-general Mark Brnovich said if the state had joined the 2016 multi-state agreement, it would have received only $11m.

In total, VW has agreed to pay more than $25bn in the US for claims from owners, environmental regulators, states and dealers, and offered to buy back about 500,000 polluting US vehicles. The buy-backs will continue until the end of 2019.

VW admitted in September 2015 to secretly installing software in nearly 500,000 US cars to cheat exhaust emissions tests. The vehicles emitted up to 40 times the legally allowable pollutants. In May, federal prosecutors in Detroit unsealed criminal charges against former VW CEO Martin Winterkorn. Two other former VW employees have pleaded guilty in the investigation and nine people have been charged in total.

VW has paid more than $7.4bn to buy back about 350,000 US diesel vehicles up to mid-February, court filings show.