Consumer Fraud

Korean automaker Hyundai, Kia agrees to record U.S. settlement for mileage fraud

Hyundai1 Korean automaker Hyundai, Kia agrees to record U.S. settlement for mileage fraudHyundai Motor Co. and its affiliate Kia Motors Corp. has agreed to a $350 million settlement with the U.S. government related to charges the Korean automaker overstated the fuel efficiency of its vehicles. The settlement is being touted by government officials as the largest of its kind. The settlement comes after an investigation determined Hyundai-Kia had overstated the mileage figures on an estimated 1.2 million of its 2012 model vehicles.

This latest settlement compensates the U.S. Environmental Protection Agency (EPA), U.S. Department of Justice, and the California Air Resources Board. The penalties were levied under the Clean Air Act.

In December 2013, Hyundai and Kia settled a class action lawsuit brought by vehicle owners who claimed economic losses resulting from the mileage fraud for $395 million. As part of that settlement agreement, Hyundai and Kia agreed to amend the window stickers on its vehicles to reflect the correct miles-per-gallon (MPG) fuel usage. Most vehicles were off by 1- or 2-MPG, but some Kia models were wrong by as much as 6-MPG.

According to the terms of the latest settlement, Hyundai and Kia will pay a $100 million fine, will be required to spend $50 million to prevent future violations, and also will forfeit more than $200 million in EPA emissions credits.

“This will send an important message to automakers around the world that they must comply with the law,” said Attorney General Eric Holder.

Green Car Reports