AUSTIN— Texas Attorney General Ken Paxton said on Oct. 27 his office's Consumer Protection Division (CPD) obtained $2.8 million for the state as part of a $41.2 million multistate settlement with automakers Hyundai and Kia.
The CPD’s investigation into the automakers practices revealed Hyundai and Kia misrepresented mileage and fuel economy ratings for a number of their 2011-2013 vehicles, a violation of the Texas Deceptive Trade Practices Act.
Texas and 32 other states accused Hyundai and Kia of deceiving unsuspecting consumers and profiting from false mileage claims that were advertised during a period of high gasoline prices.
Award by State Each State's Attorney General's report
“Hyundai and Kia intentionally falsified fuel economy ratings in order to mislead and deceive Texas consumers,” said Paxton in the release. “This settlement will help deter future false advertising, protect consumers, and ensure fairness in the marketplace.”
On Nov. 2, 2012, the defendants announced the adjustment of the fuel economy estimates for certain model year 2011 through 2013 vehicles and voluntarily initiated customer reimbursement programs for current and former owners who had purchased the specified vehicles that were the subject of the adjustment. Hyundai and Kia also notified the National Association of Attorneys General auto working group regarding their adjustment of certain fuel economy estimates and customer reimbursement programs. As a result, a Multistate Working Group (MSWG) was formed to investigate the issue.
Jim Trainor, product media relations manager for Hyundai told the Southeast Texas Record, “We’ve been refunding customers since 2012. More than 75 percent of eligible Hyundai customers have been, or currently are being reimbursed for the fuel economy ratings restatement. We’ve given customers a choice in how they want to be reimbursed for the difference in fuel economy ratings – through either a one-time lump sum payment or a lifetime reimbursement program based on their actual mileage and the fuel costs for the region in which they live.”
Trainor said additional answers surrounding the settlement can be found in Hyundai’s press release. The release states, in part, that following Hyundai’s ratings restatement in 2012, it contacted the state attorneys general and produced information to a multistate working group regarding the cause of the restatement and demonstrated that affected consumers had been fully reimbursed.
“It was these discussions with the attorneys general that ultimately led to today’s amicable agreement with 33 states and the District of Columbia. The agreement importantly contains no admission of any wrongdoing or violations of any law,” the release said.
“Even with our adjusted ratings, we are encouraged that Hyundai continues to lead the automotive industry in fuel efficiency and environmental performance,” said David Zuchowski, president and CEO of Hyundai Motor America.
In addition to Texas, the multistate group includes Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Maine, Massachusetts, Missouri, Nebraska, New Jersey, New Mexico, Nevada, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Virginia, Washington and Wisconsin and the District of Columbia.
The agreed final judgment, issued Oct. 27 required an injunction preventing the defendants from misrepresenting, and a total settlement of $41,223 320. The ruling means $2,846,691.90 will go to Texas for its share in the settlement. This share will be used to offset the costs of the investigation, attorney fees and legal costs, and, if applicable, allocated for future consumer protection enforcement actions.