Hyundai settles false advertising lawsuits

Feb. 27, 2013 at 5:48 PM
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LOS ANGELES, Feb. 27 (UPI) -- Korean automaker Hyundai Motor Co. has agreed to settle class-action lawsuits over exaggerated fuel efficiency ratings for its cars, court papers say.

The Detroit News reported Wednesday that Hyundai would offer car owners a cash settlement or a voucher for another car purchase worth half again as much – or 150 percent – of the cash settlement.

The payment to owners is to be calibrated based on the extra fuel costs incurred while driving a car that did not live up to its advertised fuel efficiency rating plus 15 percent.

Hyundai explained the settlement through an example. The original owner of a Hyundai vehicle in Florida would receive an $88 refund in 2013 and additional refunds for as long as they own the same car. The example is based a car that is driven 15,000 miles per year.

If the owner of the Hyundai is not the original owner, the settlement is half of what the original owner would get, the News reported.

Hyundai based its advertising on a slogan of "4 for 40," which meant it produced four brands of cars it said had fuel efficiency ratings of 40 miles per gallon or more.

In November, however, Hyundai and related automaker Kia admitted they had exaggerated fuel efficiency claims, which amounts to false advertising for 1.1 million vehicles sold in North America since 2010, the majority of those in the United States.

The two companies have put aside $400 million to cover the class-action lawsuits, 38 of which were filed.

Kia is reviewing the settlement, which was filed in the U.S. District Court in Los Angeles.

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