Alabama and 29 other states have reached an agreement with Toyota Motor Corporation to settle allegations that the auto maker hid what it knew about safety problems related to sudden unintended acceleration, Alabama Attorney General Luther Strange announced Thursday. Toyota agreed to pay $29 million to resolve the claims that it violated consumer protection rules.
The Japanese auto maker also agreed to provide additional restitution and incentives to vehicle owners designed to make vehicle information more easily accessible to consumers. These measures will help drivers operate their vehicles safely by helping them to make more informed choices.
Alabama will receive $641,995 as part of the deal, which also restricts Toyota from making safety claims in its advertising without sound engineering data to back up the claims.
According to Mr. Strange, the states alleged that Toyota engaged in “unfair and deceptive practices” when it failed to disclose in a timely manner the defects it knew affected the accelerator assemblies in many of its vehicles.
“I am pleased that this settlement will protect consumers by requiring honest and effective disclosures of safety issues,” Mr. Strange said in a statement.
State investigations determined that poor communication between Toyota’s headquarters in Japan and the company’s U.S. offices was partly responsible for the failure to comply with U.S. regulations, which give carmakers a timeframe within which to conduct safety recalls after discovering a problem. Toyota has agreed to address its chain-of-command problems and improve its safety culture to prevent regulatory compliance failure in the future.
Toyota paid record fines of nearly $50 million to the National Highway Traffic Safety Administration (NHTSA) in 2010 for knowing about the defects but failing to notify safety regulators and consumers about them in a timely manner and conducting a recall. In December, NHTSA fined Toyota again for $17.4 million for failing to report floor mat defects in its Lexus RX 350 and RX 450h sport utility vehicles.
According to Mr. Strange, terms of the agreement also mandate that Toyota is:
- Prohibited from reselling a vehicle it reacquired with alleged safety defects without informing the purchaser about the alleged defect(s) and certifying that the reacquired vehicle has been fixed,
- Prohibited from misrepresenting the purpose of an inspection or repair when directing consumers to bring their vehicles to a dealer for inspection or repair, and
- Required to exclude from the “Toyota Certified Used Vehicles” or “Lexus Certified Pre-Owned Vehicles” categories any vehicle acquired through lemon law proceedings or voluntarily repurchased by Toyota to ensure customer satisfaction.