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E.U. working with consumer groups to pressure VW for compensation

Posted On: Jul. 25, 2016 12:00 AM CST

(Reuters) — Europe's Commissioner for Justice is working with E.U. consumer groups to pressure Volkswagen A.G. to compensate clients in Europe as it has in the United States over the diesel emissions scandal.

The German carmaker has pledged up to $15.3 billion to compensate 475,000 owners of VW diesel-powered cars, but has so far rejected such calls for the 8.5 million affected vehicles in Europe, where different legal rules weaken the chances of winning a pay out.

Instead, it is implementing a technical fix approved by regulators to remove illicit software that cheated emissions tests, saying this meant car owners in Europe would not suffer a loss of value. Most U.S. owners will get $5,100 to $10,000, based on the pre-scandal value of their vehicles.

Seeking to step up pressure on VW, European Commissioner Vera Jourova said in an email: “We are working with the consumer authorities to ensure E.U. consumers get a fair treatment.”

The Commissioner sent a letter to national consumer protection authorities in the 28 member states last week to gather information on the difficulties they face and how they might coordinate their efforts, a spokesman for the E.U. executive Christian Wigand said in an email.

Options will be discussed when the Commission organizes a meeting with consumer groups in Brussels in September, he said.

Volkswagen declined to comment.

Despite calls from Ms. Jourova and other E.U. officials for VW not to discriminate against car owners in Europe, responsibility for policing, penalties and enforcement in the E.U. lies mainly with national authorities.

Consumer groups and lawyers in Europe lack of mechanisms to marshal complaints such as U.S.-style class-action lawsuits. Legal “wiggle room” over whether software used to switch off emissions controls contravene E.U. law has muddied the waters.

Consumer organizations in Belgium, Spain and Italy have launched group actions on behalf of affected consumers, the Brussels-based European Consumer Protection said, but such recourse is not available in other E.U. nations.

“The European Commission is one of the few authority which is actually trying to do something,” Johannes Kleis of European Consumer Protection said.

“This political signal is necessary,” Mr. Kleis added. “We know that the Commission has no enforcement power, but when they coordinate action from national consumer authorities it could help to get compensation for EU car drivers.”