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Saturday, November 26, 2016

Paying Rhode Island and drivers

By TIM FAULKNER/ecoRI News staff

Image result for volkswagen scandalThe owners and leaseholders of some 500,000 Volkswagen and Audi vehicles across the country will soon be receiving their share of the settlement in the most expensive consumer-fraud case in U.S. history. 

State governments also will receive large settlement checks from the $15 billion payout by the German automaker for its fraudulent “Clean Diesel” advertising campaign.

Here is the breakdown of the payout to Rhode Island and local Volkswagen\Audi owners duped by the emission-rigging scandal.

$13.5 million goes into a state trust that will be spent on environmental projects. A court-appointed trustee will oversee the trust’s payments. The structure and objective of the trust is the same as the $4.6 million payment Rhode Island received in a 2007 settlement with American Electric Power (AEP). The power company paid $75 million to eight states for violating clean-air standards from AEP’s 16 coal-fired power plants.


Over the course of several years, the Rhode Island payout from AEP contributed to new wind turbines at state beaches, solar panels at the Rhode Island Public Transit Authority, and the replacement of the broken wind turbine at Portsmouth High School.

$3.2 million of the Volkswagen settlement goes into the Rhode Island general fund, which means it will be spent on day-to-day government expenditures. The state received $1,000 for each locally owned Volkswagen and Audi with the illegal emissions system, minus administrative costs and court fees.

3,292 Volkswagen and Audi vehicle owners in Rhode Island will receive between $5,100 and $10,000 in restitution based on the make of the car. Owners also can opt to have Volkswagen buy back the vehicle or the can keep their car and have the exhaust system modified to meet emission standards. If so, the new emission system receives an extended warranty.

The settlement also paid Connecticut $16 million for its general fund and $51 million for environmental programs. Massachusetts received $70 million for environmental programs and $20 million for its general fund.

Details on settlement options are here.

As part of another nationwide vehicle settlement, Rhode Island will receive $654,000 from automakers Hyundai and Kia for misrepresenting mileage and fuel-economy claims on model year 2011, 2012 and 2013 vehicles. The South Korean automaker agreed to pay $41 million to 33 states for overstating vehicle mileage.