LOS ANGELES -- Some Volkswagen owners say they're still waiting to complete their buybacks, almost four months after a judge approved a settlement for 2-liter diesel vehicles that were part of the automaker's emissions scandal.
Many problems with the buyback program have been ironed out over the last few months, but VW owners who financed their cars through third-party lenders, such as local credit unions or banks, say they've experienced lags in response from the company. Lenders' privacy concerns have slowed the paperwork process, said a lawyer for VW plaintiffs.
Jamie Caffrey, 36, used a third-party lender to get a loan for his 2014 Jetta TDI Sportwagen. He registered for the buyback over the summer and then uploaded all of his paperwork in October when the online claims filing system went live.
As part of the settlement, owners can choose to have their vehicles modified or bought back. Owners also will receive additional restitution payments of at least $5,100, and some could receive as much as $10,000. Buyback amounts are based largely on the vehicle's prescandal trade-in value, with adjustments for mileage.
Caffrey, a real estate investor who lives in Hollywood, Calif., said he has waited for months to get a buyback offer. Volkswagen later contacted him to ask for additional paperwork, but when he recently called to check the status of his application, he said he was told that the document had been accidentally rejected and that he would have to resubmit it.
"Back in November, they assured me it wouldn't be very long," Caffrey said. "But what's frustrating is the unhelpfulness."
Elizabeth Cabraser, lead counsel for the consumer plaintiffs in the VW case and lead settlement class counsel for the 2- and 3-liter vehicle settlements, said she has seen recurring issues with third-party lenders who are sometimes leery of disclosing drivers' loan amounts when asked by Volkswagen representatives.
"This is a unique situation," she said. "It's not something that is familiar to third-party lenders, so they are understandably wary about giving [loan] payoff information. They don't want to do anything that violates their customers' privacy."
Cabraser said Volkswagen has sent out letters to third-party lenders, and she also has advised drivers to contact their loan providers to give them advance notice. Once Volkswagen receives the information from the lender, "things happen very quickly."
"Once the lenders know that this is a legitimate and authorized transaction, they've been really responsive to get it done," Cabraser said.
She said customers have reported that lenders are responding and buyback appointments are being scheduled.
The scandal erupted in 2015 when Volkswagen admitted that it had rigged diesel-powered cars between 2009 and 2015 with "defeat devices" to emit much fewer pollutants during emissions tests than during normal road driving.
A judge approved a $14.7 billion settlement in October that allows drivers to have their affected vehicles with 2-liter diesel engines either bought back or modified by Volkswagen.
According to the terms of the settlement, 85 percent of the vehicles must be modified or removed from the road by Volkswagen by 2018. If the automaker does not reach this goal in time, it will be required to pay a penalty, Cabraser said.
The settlement affects 475,000 vehicles, and as of Feb. 14, more than 360,000 owners and lessees had submitted a claim, according to a Volkswagen lawyer during a court hearing last week.
Volkswagen has given offers to more than 300,000 of those individuals, and almost 250,000 offers have been accepted. Of those, 125,000 have been completed, according to the lawyer.
Early on, consumers said the automaker was not adequately prepared to handle the high volume of claims, according to a November report from the court-appointed independent claims supervisor.
The report highlighted common complaints, such as claims not being processed in a timely manner, difficulty reaching claims hotline staff and staff sometimes struggling to "provide clear answers" or giving "inaccurate information about processing timetables."
Since then, Volkswagen has increased staff and training and ramped up the number of buyback appointments, Cabraser said. Volkswagen said in a statement last week that it hired about 1,300 contract workers to meet the demand.
"There has been very steady improvement as the program has rolled out," Cabraser said. "Most of the transactions are happening very promptly."
The experience with the 2-liter vehicle claims process will inform and improve the program for the 3-liter settlement, which received preliminary approval from a judge last week, Cabraser said.
Volkswagen spokesman Jeannine Ginivan said in a statement that the automaker was "encouraged" by the response to the 2-liter settlement, saying the program was "unprecedented" in terms of size and scope.
"We know that there have been some issues along the way and our teams have been working tirelessly to make necessary adjustments and continually improve the process," she said.
VW driver Adam Hooper, 35, said he understood that the process was a "pretty big logistics nightmare," but that the company should have increased its communication with customers to let them know how the claims process was progressing.
Hooper, who had a 2013 Passat, said he registered on the claims portal over the summer but did not receive a buyback offer until late December. He finally turned in his car last week.
"It just seems like there were a lot of misses in how it was all handled," said Hooper, who lives in southern Oregon but commutes regularly to Palo Alto, Calif., where he serves as chief executive of a real estate investment company. "They had an opportunity to kind of do it right and retain some brand loyalty, but ... I don't think I will ever have the desire to buy another Volkswagen."
Business on 02/25/2017