Buying cars that are “certified pre-owned” (CPO) has long been a way for consumers to get a car they know they can rely upon without having to pay the high prices associated with cars that come right off the lot. Because CPO models tend to go for a lower price than brand new cars, Volkswagen Group of America and Audi of America allegedly decided to sell pre-production models of some of their cars and label them “CPO,” according to a new consumer lawsuit. The proposed class action alleges the cars that were sold to American buyers did not meet U.S. motor vehicle regulations, meaning they posed a safety risk to American consumers.
Michael J. Melkersen is an attorney who filed the lawsuit on behalf of consumers in the states of Colorado, New Jersey, and Washington. Motley Rice LLC is also providing representation for consumers in this proposed class action lawsuit, which has been filed in the U.S. District Court for the Eastern District of Virginia. Melkersen said in a statement that, in addition to allegedly committing fraud by selling vehicles that had not passed U.S. safety regulations, the two car companies and their German parent companies had allegedly furthered their misconduct by trying to cover it up when they allegedly lied about the mileage on the vehicles, including allegedly using a secret data feed, which it sent to Carfax so it would show a misleading report of the car’s mileage.
The lawsuit alleges the consumers never would have paid such a low price for the vehicles (or bought them at all) if they had known the truth about them.
More specifically, the lawsuit alleges the vehicles were deliberately mislabeled as “CARFAX 1-Owner” vehicles, when in fact they were merely Press-Fleet Cars (vehicles that get driven by various members of the automotive press for review purposes). Press-Fleet Cars are allegedly significantly less valuable than CARFAX 1-Owner cars because of all the rigorous testing they go through multiple times, yet the lawsuit alleges these Press-Fleet Cars were sold at CARFAX 1-Owner prices.
The consumer lawsuit further alleges Volkswagen conducted this fraudulent scheme in order to boost its own sales. When it realized that public scrutiny of these practices was a possibility, it allegedly engineered a recall but delayed it for two years until May of 2018. Even when Volkswagen did issue the recall, the number of vehicles it offered to buy back was allegedly far fewer than the number of vehicles it actually sold illegally under its CPO program.
Given Volkswagen’s recent fines for allegedly violating U.S. emissions regulations, it’s hard to imagine they would have knowingly committed further violations when selling their vehicles to U.S. consumers. Trust is imperative in the automotive industry, and once lost, is not easily regained. If the allegations in the current auto consumer class action lawsuit turn out to be true, marketers for both Volkswagen and Audi will have their work cut out for them when it comes to winning back American consumers and convincing them that their vehicles are trustworthy.