By Park Jin-hai
The Fair Trade Commission said Monday it has begun investigating Volkswagen’s advertisements to see if they misled customers.
The commission requested Volkswagen submit related documents and it will review whether the German carmaker has breached the local law that prohibits advertising that can mislead customers by exaggeration and giving false information about the products.
Volkswagen Korea has been using the terms “clean diesel” and “eco-friendly” in their sales campaigns since 2009, stressing their diesel engines have passed the high emission standards of the U.S. and Europe.
The decision followed the announcement of the Ministry of Environment last week that concluded it had found evidence of emission cheating software in Volkswagen and Audi models, ordering the recall of 123,000 cars and slapping a 14.1 billion won fine on the company.
If false advertising is confirmed, the German carmaker can be levied with a fine that could reach 2 percent of their total sales at maximum, as well as being sued by the prosecution.
Some say that the fine on Volkswagen and Audi could go as high as tens of billions of won, as customers can seek additional compensation. “When a carmakers’ wrongdoing is confirmed by the commission, the law allows customers to file for compensation,” said Jung Jae-hong, an attorney at Daeryook & Aju law firm.
The U.S. Federal Trade Commission has been investigating the German carmaker for the same accusation of false advertising. Some customers in the U.S. claim they should be reimbursed for buying a car that pollutes more than had been advertised.
In the meantime, despite the scandal, Volkswagen dealers have been enjoying brisk sales, thanks to its aggressive local promotions. The industry estimates its sales this month will be around 3,600, which is will be the second highest only after July sales result with 4,321.
If prediction holds, it will be more than a 30 percent sales increase compared with the same month last year.