Volkswagen of America, Inc

Text (OCR of the scan at left; may contain errors)

In THE MATTER OF VOLKSWAGEN OF AMERICA, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket 9154. Complaint, April 1, 1981—Decision, April 13, 1988 This consent order requires, among other things, a Troy, Mich. automobile company to offer an arbitration program to owners of certain Volkswagen and Audi automobiles with faulty valve seals and other oil consumption-related problems. Appearances For the Commission: Robert M. Doyle.

For the respondents: Herbert Rubin, Herzfeld & Rubin, P.C., New York City.

Complaint Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Volkswagen of America, Inc., a corporation subject to the Commission’s jurisdiction, hereinafter sometimes referred to as respondent VWoA, and Volkswagenwerk Aktiengesellschaft, a corporation subject to the Commission’s jurisdiction, hereinafter sometimes referred to as respondent VWAG, has violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent Volkswagen of America, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New Jersey with its principal office and place of business located at 27621 Parkview Road, Warren, Michigan. Respondent VWoA is a subsidiary of respondent VWAG. Respondent Volkswagenwerk Aktiengesellschaft is a corporation organized, existing and doing business under and by virtue of the laws of the Federal Republic of Germany, with its principal office and place of business located at 3180 Wolfsburg, West Germany. VWAG dominates or controls the acts and practices of its subsidiary, respondent VWoA.

Par. 2. Respondent VWoA is now and has been engaged in the VOLKSWAGEN OF AMERICA, INC., ET.AL. 393 392 Complaint production, distribution, offering for sale or sale of vehicles or vehicle parts.

Par. 3. Respondent VWAG is now and has been engaged in the production, distribution, offering for sale or sale of vehicles or vehicle parts delivered to purchasers in the United States. [2] Par. 4. Respondent VWAG, directly or through its subsidiaries, maintains and has maintained a substantial course of business, including some of the acts and practices alleged in this complaint, in or affecting commerce, as “commerce” is defined in the Federal Trade . Commission Act.

Respondent VWoA maintains and has maintained a substantial course of business, including some of the acts and practices alleged in this complaint, in or affecting commerce, as “commerce” is defined in the Federal Trade Commission Act. , , Par. 5. Respondents cooperate and act together in effecting some of the acts and practices as hereinafter set forth. Par. 6. An abnormally high number of Volkswagen and Audi vehicles sold in the United States beginning in the 1974 model year and continuing at least through the 1979 model year and equipped with water-cooled engines have experienced, are experiencing, or are likely to experience one or more of the following conditions: a. engine problems which may require expensive engine repairs when high rates of oil consumption are experienced; these repairs may include, but are not limited to, replacement of valve stem seals, replacement of cylinder heads, or other valve repairs; b. engine failures related to lack of oil; Such conditions are costly to correct or may significantly affect the quality, reliability, durability, or performance of the vehicles. Par. 7. Respondents knew or should have known that the conditions described in paragraph six above exist. Par. 8. Respondents have failed and are failing to disclose to owners or to prospective purchasers of Volkswagen and Audi vehicles equipped with water-cooled engines facts which relate to the existence, nature, extent, prevention, diagnosis, or proper repair of the conditions described in paragraph six above. ; Par. 9. The facts described in paragraph eight above are material to many prospective purchasers because such facts, if known, would be likely to affect their decisions concerning the purchase of Volkswagen and Audi vehicles.

Par. 10. The facts described in paragraph eight above are material to many owners because such facts, if known, would be likely to affect their decisions concerning the maintenance, repair, use or care of Volkswagen and Audi vehicles.

Decision and Order 110 F.T.C.

Par. 11. Respondents have failed and are failing to disclose material facts to prospective purchasers and to owners of Volkswagen and Audi vehicles. [3] Par. 12. The acts and practices of respondents in failing to disclose material facts have had and continue to have the capacity and tendency to mislead many members of the public, particularly those who may consider purchasing, or who own, Volkswagen and Audi vehicles. Par. 13. The acts and practices of respondents also have caused or continue to cause substantial economic harm to many members of the public who have paid or continue to pay for goods and services which they might not otherwise have purchased if respondents had adequately disclosed such material facts. The goods and services may include, but are not limited to, those sold by respondents for the repair or replacement of components installed in Volkswagen and Audi vehicles.

Par. 14. The acts and practices of respondents have caused or continue to cause substantial economic harm to many members of the public who do not take preventive measures which they might take if such material facts were adequately disclosed. Par. 15. The acts and practices of respondents in failing to disclose material facts as alleged herein were and are all to the prejudice and injury of the public and constitute unfair or deceptive acts or practices in or affecting commerce, in violation of Section 5 of the Federal Trade Commission Act, as amended.

DECISION AND ORDER The Commission having heretofore issued its complaint charging the respondents named in the caption hereof with violation of Section 5 of the Federal Trade Commission Act, as amended, and the respondents having been served with a copy of that complaint, together with a notice of contemplated relief: and The respondents, their attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by respondent Volkswagen of America, [2] Inc., of all the jurisdictional facts set forth in the complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission’s Rules; and The Secretary of the Commission having thereafter withdrawn this matter from adjudication in accordance with Section 3.25(c) of its Rules; and The Commission having considered the matter and having there- VOLKSWAGEN OF AMERICA, INC., ET AL. 395 - 392 Decision and Order upon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure described in Section 3.25(f) of its Rules, the Commission hereby makes the following jurisdictional findings and enters the following order:

1. Respondent Volkswagen of America, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of New Jersey, with its office and principal place of business located at 888 West Big Beaver, in the City of Troy, State of Michigan. [3] .

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of respondent Volkswagen of America, Inc., and the proceeding is in the public interest. | ORDER DEFINITIONS For the purposes of this order, the following definitions shall apply: A. “VWoA” - Volkswagen of America, Inc., and its successors and assigns, and their officers, representatives, agents, and employees. B. “Covered Vehicle” - A 1974-1979 model year gasoline powered Volkswagen or Audi vehicle equipped with a water-cooled engine, that was:

1) distributed for sale in the United States by VWoA, 2) warranted in writing by VWoA, or [4] 3) certified by the manufacturer to the National Highway Traffic Safety Administration and Environmental Protection Agency as meeting Federal safety and emissions standards. C. “Specified Claims” - Claims made at any time prior to the expiration date of this order by present or former owners or lessees (unless the lessor bore the cost of the claim) of covered vehicles concerning excessive oil consumption or engine damage due to lack of lubrication in covered vehicles other than claims for personal injury, damage to property other than the vehicle itself, or consequential damages such as lost value, profits, wages, or business opportunities. Specified claims do not include claims for which the owner or lessee has executed a release in consideration of settlement of an individual lawsuit. Specified claims also do not include claims that are covered by a binding final judgment on the merits in an individual lawsuit. , D. “Dealer” - Any person, partnership, firm or corporation which, pursuant to a Volkswagen or Audi Dealer Agreement with VWoA or any of its independent distributors, purchases or receives on consign- Decision and Order 110 F.T.C.

ment from VWoA or its independent distributors vehicles for resale or lease to the public, [5] including persons, partnerships, firms, or corporations owned or operated by VWoA or its independent distributors.

E. “Internal engine components” - All gasoline and diesel engine parts, components, and subassemblies included within the complete short block and cylinder head assemblies, including short blocks and cylinder heads, camshafts, valve train components, timing gears, flywheels, pistons, piston rings, crankshafts, connecting rods, and bearings, oil pumps, and associated fasteners, seals and gaskets. F. “Product Service Publication” (“PSPs”) - “Product Circulars,” “Service Circulars,” “Technical Bulletins,” and other documents substantially the same in content and purpose issued from time to time by VWoA to dealers, to regional offices or to independent distributors, or individual articles, notices, entries or the like in such documents, which describe, or recommend or discuss:

(1) diagnostic, repair, or maintenance procedures; or (2) additional parts or upgrades or different replacement parts; or [6] (8) non-repair information regarding the use and care of vehicles. If a publication contains more than one subject which is considered a PSP, then each such subject shall be considered to be an individual PSP. PSPs do not include publicly available repair manuals, parts catalogs, price lists or supplements thereto. G. “Product Condition” - The condition of a vehicle that gives rise to any repair, maintenance, use and care or diagnostic procedures or the use of additional, upgraded or different parts, that is or would be described in PSPs.

H. “PSP Index”’- A document, clear and comprehensible to prospective purchasers and vehicle owners, which contains entries for all PSPs published during the term of this order by VWoA. (1) Each index shall contain an introductory section, which shall include the following information clearly and conspicuously stated: (a) an explanation of the PSP Index and the “PSP [7] Highlights” section;

(b) how to obtain PSPs from VWoA and how to review PSPs at VWoA’s dealers;

(c) how to locate the “PSP Highlights” section; and (d) the PSP prepared and issued pursuant to paragraph G(1) of section V.

(2) For each entry in the PSP Index, the following information will be clearly and conspicuously stated:

VOLKSWAGEN OF AMERICA, INC., ET AL. 397 392 Decision and Order (a) the particular model(s), model year(s), and Vehicle Identification Numbers (if the PSP does not apply to the entire model year) to which the entry applies or potentially applies;

(b) the subject of the PSP;

(c) the major component or system of components to which the PSP relates;

(d) the identifying number of the PSP to which the entry relates; and [8] (e) whether there is an entry in the “PSP Highlights” section of the PSP index for the PSP;

(3) The PSP Index shall contain a separate section, readily accessible, entitled “PSP Highlights.”

I. “PSP Highlights” - Information related to a particular PSP, that includes all of the following items as applicable: (1) a description of the product condition; (2) a description of the principal symptoms of the product condition; (8) the steps or possible steps that can be taken to minimize or avoid the product condition;

(4) a statement that additional, upgraded or different parts are called for to address the product condition; (5) a statement that the diagnostic, repair or maintenance procedure discussed in the PSP has to be repeated; [9] (6) a statement of the immediate and long-range performance consequences of the product condition; and, if avoidance of repair costs is a reason for undertaking the procedure, a statement of the estimated repair costs, if known, or, if not known, a characterization of such costs of not performing the procedures in a timely manner; (7) the following statement: “The estimated cost of repairing this condition is [less than $150] [approximately $150-$250] [approximately $250-$400] [approximately $400-$800] [more than $800].” The cost range included shall be based on the cost calculated according to the formula set forth in Definition J(2);

(8) a description of the underlying PSP(s) sufficient to permit an interested person to identify and order the PSP(s) from VWoA or review it at a dealer; and (9) to the extent not apparent from the foregoing, a disclosure of the primary intended benefit(s) of this information. [10] J. “Costs” - (1) ‘Reference cost” in paragraph D of section I means one hundred sixty-five dollars ($165), adjusted in the month when this order is served and annually thereafter, by a ratio, the numerator of which is the most recently published quarterly “Implicit Price Deflator” (IPD) for the Gross National Product, and the denominator of which is the Decision and Order 110 F.T.C.

IPD for the second quarter of 1985, adjustments to be rounded to the nearest dollar. IPDs used in these annual adjustments shall have been computed using the same base year.

(2) “Cost(s)” other than “reference cost” in paragraph D of section I shall be calculated by adding the suggested retail price for parts which are or may be required and the applicable national average dealer warranty labor rate charges multiplied by the time required to effectuate the repair, replacement, diagnosis or maintenance as determined by the applicable Suggested Repair Times Manual or other labor time guide used by VWoA in the calculation of warranty reimbursement rates.

K. “Background Statements” - The documents attached hereto as Attachments A, and A100, B, and B100. [11] L. “Claimant” - Any person, partnership, corporation, or other entity, other than (1) a dealer, or (2) any other entity which is engaged in the business of repairing, servicing, selling, leasing or trading motor vehicles or motor vehicle engines, or (8) a commercial enterprise which operates a fleet of more than fifteen vehicles.

M. “United States” - The fifty states, the District of Columbia, and all commonwealths, territories, and possessions. N. Independents 1 4 5 1 3 1174 1536 229 33 92.442177 distributor”5 1 4 5 1 4 1413 1554 11 5 92.442177 -5 1 4 5 1 5 1437 1534 226 34 96.368332 World-Wide5 1 4 5 1 6 1677 1534 240 40 93.304695 Volkswagen,5 1 4 5 1 7 1932 1534 80 38 93.154701 Inc.,5 1 4 5 1 8 2026 1534 90 32 93.200928 Rivi-4 1 4 5 2 0 806 1584 1310 42 -1 5 1 4 5 2 1 806 1599 63 22 97.014725 era5 1 4 5 2 2 883 1588 143 38 90.979088 Motors,5 1 4 5 2 3 1042 1587 80 38 90.979088 Inc.,5 1 4 5 2 4 1138 1587 231 39 96.165504 Volkswagen5 1 4 5 2 5 1385 1585 258 38 93.299019 Mid-America,5 1 4 5 2 6 1660 1585 79 38 91.889648 Inc.,5 1 4 5 2 7 1756 1585 70 32 96.807877 ands 1 4 5 2 8 1841 1596 70 29 96.528755 any5 1 4 5 2 9 1926 1584 101 33 93.295807 others 1 4 5 2 10 2042 1594 74 31 93.007294 per-4 1 4 5 3 0 807 1635 1308 44 -1 5 1 4 5 3 1 807 1650 73 27 96.051292 son,5 1 4 5 3 2 913 1638 234 41 95.995758 partnership,5 1 4 5 3 3 1180 1638 82 32 96.651680 firms 1 4 5 3 4 1294 1647 39 23 96.796638 or5 1 4 5 3 5 1365 1638 218 39 96.254646 corporations 1 4 5 3 6 1615 1636 79 33 96.789635 that5 1 4 5 3 7 1726 1636 202 32 93.132301 distributes5 1 4 5 3 8 1960 1635 155 33 86.767479 VWoA’s4 1 4 5 4 0 806 1688 729 40 -1 5 1 4 5 4 1 806 1689 152 33 96.313805 vehicles5 1 4 5 4 2 974 1692 36 30 96.911873 to5 1 4 5 4 3 1027 1689 135 32 96.628067 dealers5 1 4 5 4 4 1178 1698 45 23 96.362686 on5 1 4 5 4 5 1240 1698 21 22 95.888092 a5 1 4 5 4 6 1277 1688 141 40 95.888092 regular5 1 4 5 4 7 1433 1688 102 32 95.322372 basis.3 1 4 6 0 0 806 1737 1309 93 -1 4 1 4 6 1 0 848 1737 1267 43 -1 5 1 4 6 1 1 848 1741 39 32 92.301826 O.5 1 4 6 1 2 909 1740 149 40 82.767326 “Engines 1 4 6 1 3 1072 1740 146 40 96.494392 damages 1 4 6 1 4 1232 1739 68 32 96.260712 dues 1 4 6 1 5 1316 1743 32 28 95.531303 to5 1 4 6 1 6 1365 1738 76 33 95.425285 lacks 1 4 6 1 7 1456 1738 42 41 95.425285 of5 1 4 6 1 8 1508 1737 231 33 93.146080 lubrication”5 1 4 6 1 9 1750 1756 11 5 93.146080 -5 1 4 6 1 10 1775 1737 130 33 96.426483 Claims5 1 4 6 1 11 1920 1737 41 32 96.426483 of5 1 4 6 1 12 1969 1737 146 39 96.411377 damage4 1 4 6 2 0 806 1786 1309 44 -1 5 1 4 6 2 1 806 1795 36 29 96.932594 to5 1 4 6 2 2 854 1791 154 33 96.743759 internal5 1 4 6 2 3 1020 1791 125 39 96.735649 engines 1 4 6 2 4 1156 1792 226 37 96.696808 components5 1 4 6 2 5 1393 1789 127 32 95.882668 caused5 1 4 6 2 6 1530 1788 45 41 95.973259 by5 1 4 6 2 7 1586 1788 217 33 96.649849 insufficient5 1 4 6 2 8 1813 1788 219 33 96.807175 lubrication.5 1 4 6 2 9 2045 1786 70 41 96.578636 [12]3 1 4 7 0 0 807 1838 1310 245 -1 4 1 4 7 1 0 848 1838 1269 43 -1 5 1 4 7 1 1 848 1842 36 32 92.778290 P.5 1 4 7 1 2 907 1841 87 40 92.266602 “MQ5 1 4 7 1 3 1009 1841 132 32 95.733749 Services 1 4 7 1 4 1156 1840 126 32 95.733749 Actions 1 4 7 1 5 1292 1839 192 41 87.889984 Program”5 1 4 7 1 6 1498 1857 11 6 87.889984 -5 1 4 7 1 7 1524 1839 73 33 96.717293 Thes 1 4 7 1 8 1613 1839 107 33 96.318810 recalls 1 4 7 1 9 1737 1839 70 33 95.831657 ands 1 4 7 1 10 1822 1838 295 33 95.831657 reimbursement4 1 4 7 2 0 807 1889 1310 43 -1 5 1 4 7 2 1 807 1893 185 39 96.258316 campaigns 1 4 7 2 2 1007 1891 162 33 95.771996 initiated5 1 4 7 2 3 1183 1890 46 41 93.302673 by5 1 4 7 2 4 1243 1890 127 33 92.522636 VWoA5 1 4 7 2 5 1384 1890 191 40 96.644043 beginning5 1 4 7 2 6 1590 1890 36 33 96.580009 in5 1 4 7 2 7 1642 1890 178 39 96.610092 February5 1 4 7 2 8 1837 1890 85 32 96.278343 19825 1 4 7 2 9 1937 1889 115 33 93.228737 which5 1 4 7 2 10 2067 1889 50 32 92.934151 in-4 1 4 7 3 0 808 1940 1308 42 -1 5 1 4 7 3 1 808 1943 123 34 96.590553 cluded5 1 4 7 3 2 943 1943 106 33 96.724899 offers5 1 4 7 3 3 1060 1945 37 30 96.844040 to5 1 4 7 3 4 1109 1942 137 40 96.747208 replaces 1 4 7 3 5 1257 1941 101 33 96.526688 valves 1 4 7 3 6 1370 1944 90 30 96.552246 stems 1 4 7 3 7 1472 1941 90 33 96.453293 seals5 1 4 7 3 8 1575 1941 69 32 96.119316 ands 1 4 7 3 9 1656 1944 36 29 96.948174 to5 1 4 7 3 10 1704 1940 193 33 96.275742 reimburses 1 4 7 3 11 1909 1941 96 39 96.748383 prior5 1 4 7 3 12 2016 1940 100 32 96.458717 valve4 1 4 7 4 0 807 1991 1308 43 -1 5 1 4 7 4 1 807 1998 91 30 96.273117 stems 1 4 7 4 2 912 1994 73 33 96.539261 seals 1 4 7 4 3 1000 1993 236 41 96.015968 replacements 1 4 7 4 4 1251 2003 47 29 96.383629 up5 1 4 7 4 5 1312 1995 35 30 96.383629 to5 1 4 7 4 6 1362 1992 86 37 96.599480 $1255 1 4 7 4 7 1464 1992 36 33 95.465164 in5 1 4 7 4 8 1517 1992 84 32 95.465164 19775 1 4 7 4 9 1616 1991 153 41 96.421814 through5 1 4 7 4 10 1785 1992 85 32 96.042709 19795 1 4 7 4 11 1885 1991 230 39 96.640068 Volkswagen4 1 4 7 5 0 807 2042 1178 41 -1 5 1 4 7 5 1 807 2045 127 33 95.945450 Rabbits 1 4 7 5 2 950 2044 70 34 96.578819 ands 1 4 7 5 3 1036 2043 154 34 96.043915 Scirocco5 1 4 7 5 4 1206 2044 152 32 96.674225 vehicles5 1 4 7 5 5 1374 2043 170 40 96.689529 equipped5 1 4 7 5 6 1560 2043 85 32 96.761406 with5 1 4 7 5 7 1661 2042 155 41 96.316307 gasolines 1 4 7 5 8 1832 2043 153 39 96.152863 engines.3 1 4 8 0 0 808 2092 1309 147 -1 4 1 4 8 1 0 849 2092 1268 45 -1 5 1 4 8 1 1 849 2097 38 40 93.054588 Q.5 1 4 8 1 2 913 2095 233 33 92.771545 “Arbitration5 1 4 8 1 3 1165 2094 215 41 88.935165 agreement”5 1 4 8 1 4 1396 2112 10 6 88.935165 -5 1 4 8 1 5 1425 2094 72 33 96.525978 Thes 1 4 8 1 6 1516 2094 90 32 96.525978 forms 1 4 8 1 7 1624 2094 80 32 96.345184 that5 1 4 8 1 8 1722 2096 71 30 96.593803 sets5 1 4 8 1 9 1811 2096 62 30 96.558640 outs 1 4 8 1 10 1891 2093 111 32 96.683418 issues5 1 4 8 1 11 2020 2095 37 30 96.193542 to5 1 4 8 1 12 2074 2092 43 33 97.000351 be4 1 4 8 2 0 808 2145 1309 41 -1 5 1 4 8 2 1 808 2147 194 33 90.719711 arbitrated5 1 4 8 2 2 1015 2146 211 40 95.716179 concerning5 1 4 8 2 3 1236 2145 122 34 96.554733 claims5 1 4 8 2 4 1372 2145 151 40 96.599876 relating5 1 4 8 2 5 1535 2147 36 31 96.909058 to5 1 4 8 2 6 1584 2145 155 33 96.058907 internal5 1 4 8 2 7 1752 2145 125 40 96.058907 engines 1 4 8 2 8 1891 2146 226 38 96.523232 components4 1 4 8 3 0 808 2196 775 43 -1 5 1 4 8 3 1 808 2209 39 23 96.768051 as5 1 4 8 3 2 863 2198 178 41 96.394447 described5 1 4 8 3 3 1057 2198 37 32 95.878342 in5 1 4 8 3 4 1111 2197 88 33 95.877579 Rules 1 4 8 3 5 1215 2198 20 32 96.798775 45 1 4 8 3 6 1252 2196 40 34 95.892319 of5 1 4 8 3 7 1303 2196 229 34 93.197151 Attachments 1 4 8 3 8 1548 2196 35 33 91.979416 C.2 1 5 0 0 0 1451 2297 24 32 -1 3 1 5 1 0 0 1451 2297 24 32 -1 4 1 5 1 1 0 1451 2297 24 32 -1 5 1 5 1 1 1 1451 2297 24 32 71.276566 I.2 1 6 0 0 0 778 2397 1342 146 -1 3 1 6 1 0 0 778 2397 1342 146 -1 4 1 6 1 1 0 850 2397 1269 42 -1 5 1 6 1 1 1 850 2401 33 32 96.703125 It5 1 6 1 1 2 904 2402 28 32 96.533333 is5 1 6 1 1 3 955 2400 149 38 95.890739 ordered,5 1 6 1 1 4 1127 2399 90 33 96.599731 That5 1 6 1 1 5 1239 2398 212 41 96.646500 respondents 1 6 1 1 6 1471 2398 231 40 96.585625 Volkswagen5 1 6 1 1 7 1723 2397 39 34 96.264915 of5 1 6 1 1 8 1777 2397 172 39 93.299484 America,5 1 6 1 1 9 1972 2397 80 38 92.886688 Inc.,5 1 6 1 1 10 2073 2397 46 32 96.987518 its4 1 6 1 2 0 778 2446 1341 45 -1 5 1 6 1 2 1 778 2459 2 2 0.000000 ~5 1 6 1 2 2 809 2462 194 23 13.284142 successors5 1 6 1 2 3 1014 2451 69 32 96.795761 ands 1 6 1 2 4 1093 2451 145 40 96.631546 assigns,5 1 6 1 2 5 1249 2450 70 32 96.652374 ands 1 6 1 2 6 1329 2450 93 32 96.938278 theirs 1 6 1 2 7 1432 2449 148 39 96.684006 officers,5 1 6 1 2 8 1591 2449 302 39 96.538597 representatives,5 1 6 1 2 9 1905 2451 134 37 96.587440 agents,5 1 6 1 2 10 2050 2446 69 34 96.089584 anda 1 6 1 3 0 809 2499 1311 44 -1 5 1 6 1 3 1 809 2503 207 40 96.700150 employees,5 1 6 1 3 2 1039 2502 118 40 96.773232 acting5 1 6 1 3 3 1178 2501 146 41 95.669617 directly5 1 6 1 3 4 1346 2512 39 21 96.346008 or5 1 6 1 3 5 1406 2500 153 40 96.402481 through5 1 6 1 3 6 1581 2511 70 29 96.904396 any5 1 6 1 3 7 1672 2500 205 39 96.818405 subsidiary,5 1 6 1 3 8 1900 2499 157 38 96.922279 division,5 1 6 1 3 9 2081 2509 39 22 97.019798 or VOLKSWAGEN OF AMERICA, INC., ET AL. 399 392 ; Decision and Order other device in connection with the advertising, offering for sale, sale, or distribution of any vehicle in or affecting commerce in the United States, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

A. Failing to continue VWoA’s program of issuing PSPs in a manner comparable to the program as it existed in the years 1980 through the date of service of this order, with such [13] program to continue to take into account current criteria used for issuing PSPs, such as the frequency with which the product condition has occurred and is expected to occur, the repair costs to the consumer, and the significance to the consumer of the product condition; and failing to utilize information sources such as internal corporate testing and engineering programs, marketing and other surveys purchased or used by VWoA, information from the manufacturer(s) of affected vehicles or vehicle parts, and reports from customers, dealers, and independent distributors.

B. Within 30 days after the date of service of this order, failing to prepare and issue PSP Indexes for the 1985 model year and thereafter failing to prepare and issue PSP Indexes for PSPs issued in each model year after the 1985 model year.

C. Failing to prepare and issue an entry in the PSP Index for each PSP issued, to include each such entry in an updated PSP Index, and to update cumulatively each quarter all PSP Index entries for all PSPs issued by VWoA, with each such updated PSP index to be forwarded to dealers and be available from VWoA within four months after issuance to dealers of any PSP that was not included in a prior index. [14] D. Failing to prepare and include an entry in the “PSP Highlights” section of the PSP Index, and reference it appropriately in the PSP Index, whenever:

(1) the PSP describes repair, maintenance, or diagnostic procedures not specifically covered in previously applicable repair manuals, either (i) where the cost of such procedures to a customer is reasonably expected to exceed the reference cost, or (ii) where the procedures are intended and designed to prevent future repair or replacement costs to a customer reasonably expected to exceed the reference cost; or (2) the PSP describes revisions to repair, maintenance, or diagnostic procedures in an existing repair manual where the revisions are intended and designed either (i) to prevent future repair or replacement costs to a customer reasonably expected to exceed the reference cost, or (ii) to reduce such costs by an amount reasonably expected to exceed the reference cost; or (3) the PSP describes modified (including additional, different, or Decision and Order 110 F.T.C.

upgraded) parts recommendations, where the modification is intended and designed (i) to prevent future repair or replacement costs to a customer reasonably expected to exceed the reference cost, or (ii) to reduce such costs by an amount reasonably expected to exceed the reference cost; [15] or (4) the PSP describes (i) information revising or updating information contained in owner’s manuals or maintenance schedules or (ii) non-repair information regarding the use and care of vehicles by vehicle owners or operators.

E. Beginning with the next model year commencing after the date of service of this order, failing to disclose for each model year, in a clear and conspicuous manner, in each vehicle owner’s manual or warranty booklet (where it shall be itemized in the Table of Contents and Index) for each of its vehicle lines, (1) the following statement in the exact language set forth below: Updated Service Information You Can Obtain Volkswagen of America monitors product performance in the field and regularly sends to dealers the latest service information about [VW] [Audi] vehicles. Now, you too can get these bulletins. [16] Bulletins cover a wide variety of subjects: the proper use and care of your car; costly repairs; inexpensive repairs or adjustments which, if done early may avoid costly future repairs. Some bulletins describe repairs about new or unexpected conditions. Others describe improved repair procedures or parts improvements. All of this information can also help a qualified mechanic better service your vehicle. Most bulletins apply to conditions affecting a small number of vehicles. Your dealer or a qualified mechanic may have to determine if a specific bulletin applies to your vehicle.

You can order any or all of these bulletins direct from Volkswagen of America or look at them at a [VW] [Audi] dealer. You can purchase a subscription to the bulletins which apply to a particular model and receive them as they are issued, or you can order an index which lists and identifies these bulletins and summarizes the most important ones. You also can order individual bulletins. However, the index is necessary to identify them.

(2) The above statement.shall in addition provide at least the following information in clear and comprehensible [17] language: (a) concerning indexes - (i) Indexes list each PSP, provide ordering information for individual PSPs, and are cumulatively updated quarterly. (ii) Indexes contain plain-language highlights and summaries of PSPs describing costly repairs and designed to help prevent major repairs or containing owner use and care information. (iii) If there is a charge for PSP indexes, it shall be credited against any charge for PSPs ordered.

VOLKSWAGEN OF AMERICA, INC., ET AL. 401 392 Decision and Order (iv) When consumers order any index, they will receive the latest applicable index for the model year of the car unless they request an index for a different model year. [18] (b) concerning PSPs - (i) The charge for individual PSPs, if any, and how to order them. ‘ (c) concerning subscriptions - (i) The charge for subscriptions and how to order them. (ii) That subscribers are entitled to all PSPs published for a model and model year.

(3) The following statement in the exact language set forth below, which shall be made in conjunction with the statement described above, but which shall not precede disclosure of the information de- © scribed in paragraphs E (2)(a)i) and (ii) of section I: CAUTION:

These bulletins are intended for qualified mechanics. They are not meant for the cagual do-it-yourselfer. Qualified mechanics have the equipment, tools, safety instructions, and know-how to do a job properly and safely. Improperly performed repairs or maintenance can adversely affect the safety of your vehicle, possibly [19] leading to accident or injury. They may also impair the economy, durability or reliability of your vehicle and may void the warranty on your car. If you are not sure that you can perform a job properly and safely, you should not risk trying to do so. F. Beginning with the next model year commencing after the date of service of this order, (1) failing to include for each model year, in each vehicle owner’s manual, warranty booklet, or similar literature provided with the vehicle at the time of delivery to the original retail customer a postage-paid ordering coupon to obtain a properly identified PSP index (including PSP Highlights), a PSP, or subscription; or , (2) failing to maintain a toll-free telephone system, which number shall be clearly and conspicuously disclosed in close proximity to the information set out in paragraph E of section I, to enable members of the public to order PSP indexes (including PSP Highlights, PSPs, or a subscription to PSPs). [20] G. Failing to furnish each dealer with:

(1) each PSP Index (including PSP Highlights) on paper or through such other medium as approved by designated representatives of the Federal Trade Commission, related to the vehicles represented by that dealership; and (2) each PSP; and (3) an adequate supply of postage-paid ordering coupons for PSPs, PSP subscriptions and PSP indexes.

Decision and Order 110 F.T.C.

H. Beginning with the date of service of this order, and once in each 6-month period thereafter, failing to recommend and urge, in writing, that each dealer shall:

(1) provide information on how to order PSPs to anyone who requests such information;

(2) provide members of the public with ready access to the PSPs and PSP Indexes (including PSP Highlights) furnished to such dealers, including any equipment needed to enable members of the public to read PSPs at dealerships; and [21] _ (8) update PSP Indexes (including PSP Highlights) immediately “upon receipt.

I. Beginning with the next model year after the date of service of this order, failing to include the following statement, in the exact _ language set out below, clearly and conspicuously on the face of the label required by the “Automobile Information Disclosure Act,” 15 U.S.C. 1231 et seq., (1980) (as amended) on each vehicle distributed by VWOoOA in the United States:

“UPDATED SERVICE INFORMATION—NOW YOU CAN GET USEFUL BULLETINS AND EASY-TO- READ SUMMARIES TO SERVICE YOUR CAR BETTER AND HELP AVOID COSTLY REPAIRS. THESE ARE THE SAME BULLETINS WE SEND YOUR DEALER: SEE YOUR DEALER’S INDEX OF PRODUCT CIRCULARS FOR DETAILS.”

J. Beginning with the next model year after the date of service of this order, failing to include the following statement, in the exact language set out below, clearly and conspicuously, in each principal point of sale catalog distributed by Volkswagen of America for each of its vehicle lines: [22] A Word About Updated Service Information [Volkswagen] [Audi] regularly sends its dealers useful service information about our products. [Volkswagen] [Audi] monitors product performance in the field. We then prepare bulletins for servicing our products better and helping to avoid costly repairs. Now you can get these bulletins, too. To get ordering information, see a local [VW] [Audi] dealer. :

K. Failing to include detailed information regarding the third-party arbitration program described in sections III and IV, and the PSP program described in this section, in all ongoing and future training programs and in materials disseminated to dealers on subjects related to customer relations, beginning not later than one hundred eighty (180) days after service of this order and continuing for the duration of this order.

VOLKSWAGEN OF AMERICA, INC., ET AL. 403 392 Decision and Order II.

It is further ordered, That:

A. Beginning with the date of service of this order, upon [23] written request by any person, VWoA shall mail or cause to be mailed, by first class mail, the following:

(1) information describing PSPs, PSP Indexes, and PSP subscriptions, as well as how to obtain PSPs, PSP Indexes and PSP subscriptions;

(2) the most current PSP Index, provided that, the “PSP Highlights” in the PSP Index may be limited to the particular vehicle make, model and model year identified in the request; (3) any specifically identified PSPs;

(4) subscriptions to all PSPs.

B. Subject to the limitations of this section, VWoA may, at its option, impose a reasonable charge for PSPs, PSP Indexes and PSP subscriptions. Any charge for a PSP Index must be credited toward the initial purchase of PSPs themselves. The maximum charges shall be as follows:

(1) For PSP Indexes ordered:

(a) model years prior to 1988, no charge; [24] (b) through 1990, a charge not to exceed two dollars ($2.00) for any PSP Index;

(c) for years 1991 and thereafter, a charge not to exceed three dollars ($3.00) for any PSP Index.

(2) For individual PSPs, a charge not to exceed four dollars ($4.00) for the first PSP requested in each order and two dollars ($2.00) for each additional PSP requested in that order; (3) For PSP subscriptions, a charge not to exceed the lower of the reasonable cost or the charge (if any) to dealers. ; C. VWoA may offer subscriptions of any duration, provided that, VWoOA offers the option of a subscription with a one-year duration. Ill.

It is further ordered, That:

A. VWoA shall make available in the United States to claimants [25] an arbitration program, which shall be administered through an independent and impartial third party, to resolve expeditiously and - fairly (1) each specified claim regardless of time in service, mileage, or whether the claimant still owns or leases the vehicle; and (2) each Decision and Order 110 F.T.C.

claim made or renewed after the date of service of this order by owners and lessees (unless the lessor bore the cost of the claim) of any Volkswagen or Audi vehicle distributed by VWoA, warranted in writing by VWoA, or certified by the manufacturer to the responsible federal agencies as meeting applicable federal safety and emission standards involving the claimed failure, malfunction, repair or replacement of internal engine components while the claimant owns or leases the vehicle, regardless of time in service or mileage. Provided, however, That VWoA need not make the arbitration program described above available to claimants: (1) for claims involving repairs required to place in operating condition an engine which was not operable when the vehicle was purchased or leased by an owner or lessee, other than the original retail purchaser or original lessee; or [26] (2) for claims involving internal engine components: (a) whose claims were the subject of a claim by a prior owner or lessee which was settled or resulted in an arbitration award which the prior owner or lessee accepted, or (b) if the claimant sells the vehicle prior to sixty days after the claimant notified the independent and impartial third party administrator of the claim, unless the claimant does the following: (i) notifies VWoA in writing at least.ten days before the vehicle is disposed of; and (ii) gives VWoA an opportunity to inspect the vehicle at a mutually convenient time and place.

B. The decision of the arbitrator shall be binding on VWoA, but non-binding on the claimant, unless the claimant elects to accept an arbitration award. [27] C. (1) With respect to specified claims, such third-party arbitration program shall be conducted in accordance with the Modified Rules for Arbitration published by the Council of Better Business Bureaus as specially modified and set forth in Attachment D, and (2) With respect to claims relating to internal engine components, such third-party arbitration program shall be conducted in accordance with the Modified Rules for Arbitration published by the Council of Better Business Bureaus as specially modified and set forth in Attachment C.

Provided, however, The Rules for Arbitration may be modified only with the written approval of designated representatives of the Federal Trade Commission.

D. For two years after the date of service of this order, such third- VOLKSWAGEN OF AMERICA, INC., ET AL. 405 3892 Decision and Order party arbitration program shall be conducted at no charge to the claimant by VWoA or the independent and impartial third-party administrator. Thereafter, no charges shall be imposed on claimants by VWoA or the independent and impartial third-party administrator that exceeds charges specified in the Modified Rules for Arbitration published by the Council of Better Business Bureaus. [28] E. No settlement of or judgment on the merits in a class action lawsuit shall affect a claimant’s right to request arbitration of a specified claim or claim relating to internal engine components under this order, provided that, a specified claim or claim relating to internal engine components is not eligible for arbitration if: (1) the claimant received actual notice of the pendency or settlement of the class action; and (2) the notice of pendency and, if applicable, settlement of such class action was approved by designated representatives of the Federal Trade Commission prior to submission of the notice to the court by: VWoA, as fully, accurately, clearly and conspicuously disclosing the availability of the arbitration program described in sections III and IV; and (3) the claimant did not request exclusion from the class action or settlement, or the claimant received payment pursuant to the class action settlement or judgment on the merits; [29] Provided, however, That arbitration shall continue to be available during the pendency of the class action proceeding until settlement or judgment is entered on the merits, regardless of whether the claimant requested exclusion from the proceeding. F. Such third-party arbitration program shall be fully operational pursuant to the terms of this order no later than forty-five (45) days after the date of service of this order, and thereafter expanded as demands on the program may require to resolve consumer complaints expeditiously.

G. VWoA shall, by first class mail, mail or cause to be mailed Attachment G in response to any claimant with a claim relating to internal engine components, within thirty days after receipt of such claim, unless the claimant’s request for repair or reimbursement or other compensation is fully met.

H. Notwithstanding any other provision of this order, the mediation and arbitration program described in sections III and IV shall be available to members of the armed forces stationed at military installations located outside the United States and their dependents, provided, however, that only arbitration by mail must be available as long as such claimants are located outside the United States. [30] Decision and Order 110 F-T.C.

IV.

It is further ordered, That:

A. Prior to sixty (60) days after the date of service of this order, VWoA shall contact, by first-class mail, each attorney general’s office (or such other office as may be appropriate) of the fifty states, the District of Columbia, commonwealths, territories and possessions, and shall:

(1) Provide each such office with a copy of this order. (2) Describe in such mailing VWoA’s third-party arbitration program.

(3) Describe in such mailing the PSPs and PSP Indexes and explain how consumers can obtain them.

(4) Inform each such office that VWoA will, if the appropriate office wishes, within fifteen days after receipt from such office or sixty days after the date of service of this order, whichever is later, notify by first-class mail each person who has complained to that [31] office about a specified claim, and that VWoA will provide that person in the same mailing envelope with:

(a) information about the availability of VWoA’s third-party arbitration program; and (b) one or more of the appropriate Background Statements as required to be distributed pursuant to paragraph B of section IV in connection with any specified claim.

(5) Request that each such office provide VWoA with (a) a copy of each complaint that may include a specified claim; or, at the option of that office, (b) the owner’s name and address, and the nature of the specified claim.

(6) Inform each such office that VWoA will also send, by first-class mail, a notice to any person who has complained to any other state or local law enforcement or consumer affairs office about a specified claim, and urge such office to encourage state and local law enforcement or consumer affairs offices to forward to VWoA either copies of such complaints, or, at the option of the forwarding office, a list of the names, and addresses of persons with specified claims and the amount and nature of each such claim, if known. [32] B. For purposes of paragraph B of section IV only: -a “claim” has been made if, for any oral or written request for reimbursement or repair, a document was created or received by VWoOA or any of its independent distributors, including, but not limited to, warranty records, consumer letters, dealer reports, or records of telephone complaints;

VOLKSWAGEN OF AMERICA, INC., ET AL. 407 392 Decision and Order ~ “open or unsatisfactorily resolved” claims are any claims for which the claimant did not receive all payments or free repairs claimed or requested.

_ VWoA shall send by first class mail Attachments A(or A100, if the vehicle was an Audi 100), B (or B100 if the vehicle was an Audi 100), E (2) and F, and a postage-paid return envelope, or, if VWoA wishes to make an initial settlement offer, Attachments A(or A100 if the vehicle was an Audi 100), B (or B100 if the vehicle was an Audi 100), K(1) and F, and a postage-paid return envelope to the following: (1) every claimant who, prior to the date of service of this order, had made a specified claim to VWoA that is open or unsatisfactorily resolved or who, prior to the [88] date of service of this order notifie VWoA’s independent distributors of such claim(s); (2) every claimant who has received reimbursement of $125 under VWoA’s MQ service action program, and who submitted repair orders or other documentation showing that one or more of the following - repairs occurred at a total expense of more than $125.00 which has not been fully reimbursed as of the date of service of this order: (a) cylinder head replacement;

(b) any repair involving cylinder head removal and valve repair; (c) replacement of the engine short block; (d) replacement of any one or more of the following: (i) crankshaft; (ii) connecting rod(s); (iii) main bearing(s); (iv) connecting rod bearing(s); (v) pistons; (vi) piston rings. [34] (3) every claimant with a specified claim whose name had been supplied to VWoA by the offices referred to in paragraph A of section IV, the Federal Trade Commission, or any other consumer affairs office or any third party, and whose specified claim remains open or unsatisfactorily resolved prior to the date of service of this order. (4) every claimant with a specified claim which is open or unsatisfactorily resolved whose name will have been supplied to VWoA after the date of service of this order by the offices referred to in paragraph A of section IV, the Federal Trade Commission, or any other consumer affairs office or any third party; and (5) every claimant with a specified claim which is open or unsatisfactorily resolved who, orally or in writing, contacts VWoA, any office of the independent and impartial third party administrator, or VWoA’s independent distributors after April 15, 1987, the date the Commission accepted this order for comment. Provided, however, That for any mailing made pursuant to this section which is returned to the sender as being undeliverable, VWoA shall make a reasonable attempt to obtain [35] the claimant’s current Decision and Order 110 F.T.C.

address, and shall send the mailing by first class mail to the claimant’s current address; provided, further, Attachments A and B or Attachments A100 and B100, as applicable, shall be fastened or otherwise physically attached with Attachment B (or Attachment B100) on top of Attachment A (or Attachment A100).

C. The following deadlines shall apply:

(1) For initially mailing the materials specified in paragraph B of section IV:

(a) With respect to claimants included in paragraphs B(1), (2) and (8) of section IV, all materials shall be mailed according to the following schedule:

(i) not less than 25% of the total number shall be mailed within 15 days of the date of service of this order; (ii) not less than 50% of the total number shall be mailed within 45 days of the date of service of this order; [36] (iii) not less than 75% of the total number shall be mailed within 75 days of the date of service of this order; and (iv) 100% of the total number shall be mailed within 90 days of the date of service of this order.

(b) With respect to claimants included in paragraphs B(4) and (5) of section IV, whose claims are not included in paragraphs B(1), (2) or (8) of section IV, all materials shall be mailed within fifteen days after receipt by VWoA, the independent and impartial third party administrator, or VWoA’s independent distributors of the name and address of the claimant, or sixty days after the date of service of this order, whichever is later.

(2) For the handling of specified claims:

(a) (i) claimants who accept settlement offers shall be sent the applicable monetary amount within forty-five (45) days after the settlement offer acceptance is received by VWoA; [387] (ii) claimants who accept arbitration awards shall be sent the applicable monetary amount within forty-five (45) days after the arbitration award acceptance is received by the independent and impartial third party administrator.

(b) (i) any applicable repair shall be performed within thirty (30) days after the settlement offer acceptance is received by VWoA,; (ii) any applicable repair shall be performed within thirty (30) days after the arbitration award acceptance is received by the independent and impartial third party administrator, except as otherwise ordered by the arbitrator for good cause shown.

(c) Claimants who request to participate in the independent and impartial third party arbitration program by returning the “RE- VOLKSWAGEN OF AMERICA, INC., ET AL. 409 392 Decision and Order SPONSE TO VOLKSWAGEN MEDIATION AND ARBITRATION PROGRAM” form included with Attachment E(1) or (2), shall have an arbitration hearing completed within 60 days after the “RESPONSE TO VOLKSWAGEN MEDIATION AND ARBITRATION PRO- GRAM” form [88] included in Attachment E(1) or (2) is received by VWoA, regardless of whether the claimant requests mediation services.

Provided, however, That delays attributable solely to the claimant shall not be included in the calculation of deadlines. The burden of proving that the delay is attributable solely to the claimant shall be on VWoA;

(3) For claims involving internal engine components that do not involve specified claims:

(a) an arbitration hearing shall be completed within sixty (60) days after the claimant provides the independent and impartial third party administrator with the model, model year, and Vehicle Identifi- © cation Number of the vehicle and a statement describing the nature of the complaint, regardless of whether the claimant requests mediation services.

Provided, however, That delays attributable solely to the claimant shall not be included in the calculation of deadlines. The burden of proving that the delay is attributable solely to the claimant shall be on VWoA; [389] (b) @) (1) claimants who accept settlement offers shall be sent the applicable monetary amount within forty-five (45) days after the settlement offer acceptance is received by VWoA; (2) claimants who accept arbitration awards shall be sent the applicable monetary amount within forty-five (45) days after the arbitration award acceptance is received by the independent and impartial third party administrator; (ii) (1) any applicable repair shall be performed within thirty (30) days after the settlement offer acceptance is received by VWoOA,; (2) any applicable repair shall be performed within thirty (80) days after the arbitration award acceptance is received by the independent and impartial third party administrator, except as otherwise ordered by the arbitrator for good cause shown. [40] D. Claimants with specified claims may not be required to fill out any other form to request an arbitration hearing once they have checked Choice 2 or 3 on the form included with Attachment E (1) or Choice 1 or 2 on the form included with Attachment E (2). E. VWoA may not request a claimant who accepts an offer to settle a specified claim to execute a statement releasing VWoA from further liability if the statement purports to release VWoA from liability Decision and Order 110 F.T.C.

that, at the time the claim was settled, would not have been subject to arbitration as described in sections III and IV. F. Within thirty (80) days of service of this order, VWoA shall provide to its independent distributors and appropriate employees of VWoA, including employees who have responsibility for receiving and responding to consumer complaints, written instructions stating that all consumers who make a specified claim in any oral or written communication received after the date of service of this order must be sent, by first-class mail, a letter providing the documents specified in paragraph B of section IV, above, within fifteen days, or sixty days after the date of service of this order, whichever is later. [41] G. VWoA may make an immediate binding settlement of a specified claim prior to the initiation of mediation or arbitration, provided that, prior to the settlement, the claimant received all of the materials required to be sent to the claimant pursuant to paragraph B of section IV (either Attachments E (1) or E (2) (Cover letter) and Attachments A (or A100, as applicable), B (or B100, as applicable) (Background Statements), and F (BBB specified claim brochure)). H. All envelopes sent pursuant to paragraph B of section IV shall bear no marking, other than the name and address of VWoA and the addressee, and the words “IMPORTANT REIMBURSEMENT IN- FORMATION?” disclosed conspicuously on the front. I. VWoA shall offer to each claimant at the outset of each arbitration hearing all of the materials required to be sent to the claimant pursuant to paragraph B of section IV (either Attachments E (1) or E (2) (Cover letter) and Attachments A(or A100, as applicable), B(or B100, as applicable) (Background Statements), and F (BBB specified claim brochure)). [42] J. VWoA shall obtain, maintain, and retain for a period of three (3) years from the date of resolution of each claim, records sufficient to show to the satisfaction of designated representatives of the Federal Trade Commission:

(1) For each specified claim:

(a) the following dates as applicable:

(i) the date VWoA received the claimant’s name and address, if the specified claim was received by VWoA pursuant to paragraph B (4) and B (5) of section IV.

(ii) the date the materials described in paragraph B of section IV were mailed;

(iii) the date each written response was received by VWoA from the addressee of Attachment E(1) or E(2);

(iv) the date an arbitration hearing was scheduled; VOLKSWAGEN OF AMERICA, INC., ET AL. 411 392 Decision and Order (v) the date the arbitration hearing was completed; [43] (vi) the date the arbitrator’s decision was received by the independent and impartial third-party administrator; (vii) the date(s) VWoA made each offer to settle the claim; (viii) the date the claimant accepted or rejected each settlement offer;

(ix) the date the claimant accepted or declined the arbitrator’s award;

(x) the date a check was sent to satisfy an arbitration award or settlement agreement;

(xi) the date scheduled for any repair offered as a result of an arbitration award or settlement agreement; (xii) the date any repair offered as a result of an arbitration award or settlement agreement was actually performed. (b) the following documents and information, as [44] applicable: (i) the vehicle model;

(ii) the vehicle model year;

(iii) the vehicle identification number;

(iv) a brief description of the alleged problem, including whether the ' claimant included information suggesting that excessive oil consumption or engine damage due to lack of lubrication might be involved; (v) the resolution(s) sought by the claimant: repair, cash reimbursement or vehicle repurchase;

(vi) the amount, if any, of cash reimbursement sought; (vii) the terms of each offer, if any, made by VWoA to settle the claim;

(viii) the response of the claimant to each settlement offer; [45] (ix) a copy of each arbitrator’s decision including the amount of any cash reimbursement;

(x) whether the claimant accepted the arbitrator’s award; (xi) the name and address of each claimant who owned or leased a covered vehicle, and requested to participate in the mediation and arbitration program set forth in sections III and IV, and was refused the opportunity to participate in the mediation and arbitration program;

(xii) the reason(s) each claimant described in paragraph J (1)(b)(xi) of section IV was determined not to have a specified claim; (xiii) the reason(s) known to VWoA or the independent and impartial third party administrator for the failure to resolve a claim other than by settlement or an arbitration decision; [46] (xiv) if the claim is settled, whether a third-party mediator actively participated in settlement discussions;

Decision and Order 110 F.T.C. © (xv) a copy of the “RESPONSE TO VOLKSWAGEN MEDIATION AND ARBITRATION PROGRAM” form completed by the claimant. (c) the name and address of each claimant who contacts orally VWoA, the independent and impartial third-party administrator, or VWoA’s independent distributors and states facts that suggest that the claimant may have a specified claim.

(2) For each mediation or arbitration of a claim involving an internal engine component:

(a) the following dates, as applicable:

(i) the date VWoA mailed Attachment G, described in paragraph G of section ITI;

(ii) the date the claimant first contacted the independent and impartial third-party administrator; [47] (iii) the date the independent and impartial third-party administrator received from the claimant the model, model year, Vehicle Identification Number of the vehicle and a statement describing the nature of the claim;

(iv) the date VWoA was notified by the independent and impartial third-party administrator that a claim involving internal engine components had been lodged;

(v) the date the arbitration agreement was sent to the claimant; (vi) the date the arbitration agreement was received from the claimant by the independent and impartial third-party administrator; (vii) the date the initial arbitration hearing was scheduled; (viii) the date the initial arbitration hearing was completed; [48] (ix) the date the arbitration decision was mailed to the claimant; (x) the date the claimant accepted or rejected each settlement offer from VWoA;

(xi) the date the claimant accepted or rejected an arbitration award. (b) the following information:

(i) the vehicle model;

(ii) the vehicle model year;

(iii) the vehicle identification number;

(iv) a brief description of the problem alleged; (v) the resolution(s) sought by the claimant: repair, cash reimbursement or vehicle repurchase;

(vi) the amount, if any, of cash reimbursement sought; [49] (vii) the terms of each offer, if any, by VWoA to settle the claim before the claimant contacted the independent and impartial thirdparty administrator;

(viii) the terms of each offer, if any, by VWoA to settle the claim VOLKSWAGEN OF AMERICA, INC., ET AL. 418 392 Decision and Order after the claimant contacted the independent and impartial] thirdparty administrator;

(ix) the response of the claimant to each settlement offer; (x) a copy of each arbitrator’s decision including the amount of any cash reimbursement;

(xi) whether the claimant accepted or rejected the arbitrator’s award; , (xii) the reason(s) for the failure to resolve a claim other than by settlement or an arbitration decision; [50] (xiii) if the claim is settled, whether a third-party mediator actively participated in settlement discussions; , (xiv) a-copy of the arbitration agreement; (xv) the name and address of each claimant, who requested the opportunity to participate in the third-party mediation and arbitration program set forth in sections III and IV, and was refused the opportunity to participate in said mediation and arbitration program; (xvi) the reasons each claimant specified in paragraph J (2)(b)\(xv) was determined not to be eligible to participate in the mediation and arbitration program set forth in sections III and IV. (3) Computer disks, tapes or other computer-readable media created or maintained by VWoA, on behalf of VWoA, or by the independent ‘and impartial third party administrator that contain any information specified: in paragraphs J(1) and J(2) of section IV, and necessary relevant programming and other [51] explanatory data sufficient to enable the Federal Trade Commission to read and analyze the data contained on such media.

V.

It is further ordered, That:

A. At least two times, at least one month apart, within 120 days after the date of service of this order, VWoA shall place and cause to be disseminated the advertisement attached as Attachment H(1) in national magazines as full-page advertisements. At least two times, at least one month apart, within 120 days after the date of service of this order, VWoA shall place and cause to be disseminated the advertisement attached as Attachment H(2) in national magazines as fullpage advertisements. Each time Attachment H(1) is placed and each time Attachment H(2) is placed, the magazines must have a combined total non-duplicated readership (“net reach”) of at least seventy-five million adults as measured by an outside organization generally recognized as competent and experienced in this field and used by VWoA or its advertising agencies for other advertising research. The Decision and Order 110 F.T.C.

demographic characteristics for the combined total readership of the magazines selected for [52] such advertisements must be generally representative of the demographic characteristics of the population of owners and potential purchasers of Volkswagen vehicles (for Attachment H(1)) and Audi vehicles (for Attachment H(2)). B. Beginning with the next model year commencing after the date of service of this order, VWoA shall annually include in any edition of each proprietary magazine sent by VWoA to a primary target audience of VWoA’s vehicle owners:

(1) the statements set forth in paragraph J of section I set forth clearly and conspicuously; and (2) a full page reproduction of Attachment H(1) for Volkswagen owners, or Attachment H(2) for Audi owners, as applicable. C. Within thirty days after the date of service of this order, VWoA shall furnish to each of its dealers three display posters, with the form and content of Attachment I(1) (for Volkswagen dealers) or 1(2) (for Audi dealers), each at least 24” x 36”. Thereafter, VWoA shall furnish additional copies of these posters upon request by any dealer. [53] D. Beginning with the date of service of this order, and once in each 6-month period thereafter, VWoA shall recommend and urge, in writing, that each dealer shall:

1) place the display poster, described in paragraph C of section V, in conspicuous and accessible locations within: (a) service waiting areas; and (b) parts departments; and (c) service payment areas.

E. (1) Within five (5) days after the date of service of this order, VWOoOA shall establish and maintain a toll-free telephone system which will elicit information to enable current and former owners and current and former lessees to enter the independent and impartial third-party arbitration programs set forth in sections III and IV. The toll-free telephone system shall have sufficient capacity to enable each call made by owners and lessees to be answered reasonably promptly. Each caller shall be requested to furnish the the following information, [54] which shall be documented: (a) name, address and telephone number of the caller; (b) model and model year of the vehicle;

(c) nature of the claim, including sufficient information to ascertain whether a specified claim is alleged, and, if so, whether the specified claim includes an allegation of engine damage from lack of lubrication.

(ad) the date of the call.

VOLKSWAGEN OF AMERICA, INC., ET AL. 415 892 Decision and Order (2) Each caller to the toll-free number described in paragraph E (1) of section V shall also (a) be informed that, if the caller states facts suggesting that a specified claim may be involved, that VWoA will mail a letter describing the third-party arbitration program to the caller; or b) if the caller states no facts suggesting that the claim may be a specified claim, the caller shall be informed of the toll-free telephone number (or “call collect” number, as applicable), of the local office of the independent and impartial third-party administrator. [55] F. Beginning with the next model year commencing after the date of service of this order, VWoA shall include the following information, in a clear and conspicuous manner, in each vehicle owner’s manual or warranty booklet (where it shall be itemized in the Table of Contents and Index):

(1) a description of the mediation and arbitration program for internal engine components required by sections III and IV; (2) an explanation of how the owner or lessee can enter the mediation and arbitration program;

(3) a description of applicable time deadlines as set forth in paragraph C (8) of section IV;

(4) the toll-free telephone number described in paragraph E of section V.

(5) a statement that there is no charge to the consumer for participating in the program, if such is the case, or a statement of any charges to the consumer for participating in the program; and [56] (6) a statement that the arbitration award is binding on VWoA, but is not binding on the consumer, unless the consumer elects to accept the arbitration award.

G. (1) Within 30 days after the date of service of this order, VWoA shall prepare and issue a PSP which includes the following information:

(a) a description of the mediation and arbitration program for internal engine components required by sections III and IV; (b) an explanation of how the owner or lessee can enter the mediation and arbitration program;

(c) a description of applicable time deadlines as set forth in paragraph C (3) of section IV;

(d) the toll-free telephone number described in paragraph E of section V;

(e) a statement that there is no charge to the consumer for participating in the program, if such is the case, or a statement of any charges to the consumer for participating in the program; and [57] (f) a statement that the arbitration award is binding on VWoA, but Decision and Order 110 F.T-C.

is not binding on the consumer, unless the consumer elects to accept the arbitration award.

(2) The PSP referred to in paragraph G (1) of section V shall, during the term of this order, be included with each PSP index ordered. VI.

It is further ordered, That sections I, II, III, IV, and V of this order shall expire eight years after the date of service hereof; provided, that if at any time during which said sections remain in effect, the Commission issues a final trade regulation rule imposing obligations on the automobile industry comparable to those imposed under any such section(s), such section(s) shall terminate upon the effective date of such rule, and, in such event, VWoA shall advise the Commission of its intention to rely upon any such rule as having terminated and superseded such section(s) of this order thirty (30) days in advance of reliance thereon: provided further, that if at any time during which such section(s) remain in effect the Commission issues a final guide under Sections 1.5 and 1.6 of the Commission’s Rules of Practice [58] imposing obligations on the automobile industry comparable to those imposed under any such section(s), then the Commission shall, upon VWoA’s motion or upon the Commission’s own motion, reopen this proceeding within one hundred twenty (120) days of such motion, and, within a reasonable time thereafter, vacate any such section(s) of this order, unless the Commission finds that such action is not required by changed conditions of law or fact or is not in the public interest; and provided further, that nothing herein shall preclude VWoA at any time from moving the Commission to alter, modify, or set aside this order under the Commission’s Rules of Practice. VII.

It is further ordered, That:

A. VWoA shall, within one hundred twenty (120) days after the date of service of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this order.

B. VWoA shall, within one hundred twenty (120) days after the implementation of the PSP program described in sections I and II of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which VWoA has complied with sections I and II of this order. [59] C. VWoA shall, upon request of designated representatives of the VOLKSWAGEN OF AMERICA, INC., ET AL. 417 392 . Decision and Order Federal Trade Commission, but no more frequently than every onehundred eighty days, while sections III and IV of this order are in effect, file with the Commission a report compiling and summarizing data describing settlements, mediations, and arbitrations and accompanying deadlines undertaken pursuant to sections ITI and IV which ‘have occurred since the previous such report had been completed. Such report shall include accurate summaries of the data required to be kept pursuant to paragraph J of section IV. VWoA shall also transmit to the Commission upon request the computer media and explanatory and programming information required by paragraph J(3) of section IV.

D. VWoA shall retain and transmit to the Commission upon reasonable request:

(1) a copy of each PSP Index required by section I, and a copy of each PSP;

(2) a copy of each poster furnished to dealers pursuant to paragraph C of section V. [60] E. VWoA shall, on a bi-annual basis beginning 6 months after the date of service of this order, monitor and document, based on the personal observations of VWoA or independent distributor employees, each dealer’s compliance with the items set forth in paragraph H of section I above and paragraph D of section V above, provided, however, that VWoA shall not be required to monitor and document the compliance with paragraph H of section I and paragraph D of section V by a dealer if no employee of VWoA or an independent distributor has visited that dealer within the previous six-month-period to review the dealer’s sales, service, or customer relations activities.

F, VWoA shall retain records relative to the manner and form of its continuing compliance with sections I, II, Ill, IV, V and VI for a period of three (8) years, and shall make said records available for inspection upon reasonable notice by the Federal Trade Commission. If copies of any such records are requested, VWoA may, at its option, either make such records available for copying purposes or provide copies at either (1) rates the Commission charges for copies of records released pursuant to the Freedom of Information Act, or (2) VWoA’s costs, whichever is lower. [61] :

G. Upon request by the Federal Trade Commission, VWoA shall obtain and make available to the Federal Trade Commission in the English language within forty-five days after the request any records relevant to paragraph A of section I in the possession of the manufacturer of any vehicles, engines, or transmissions which VWoA imports or distributes; provided, however, that submission of such records Decision and Order 110 F.T.C.

shall neither constitute nor be deemed an admission by any entity from which they are obtained of in personam jurisdiction of the Commission over such entity; provided further, that nothing in this section shall be construed to affect the Commission’s access to any records, documents, or other information pursuant to compulsory process or other means.

H. VWoA shall take all necessary legal and equitable action to enforce promptly and in good faith its contractual or other rights to obtain records requested by the Federal Trade Commission pursuant to paragraph G of section VII.

I. During the time that sections I, IJ, ITI, IV and V remain in effect, VWoOA shall notify the Commission prior to any change in VWoA’s corporate structure, such as dissolution, assignment, or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change in the corporation which may affect compliance obligations arising out of this order. [62] VIN.

It is further ordered, That the provisions of this order shall be limited in their application to the United States. IX.

It is further ordered, That the complaint against Volkswagen AG, a corporation, is hereby dismissed.

ATTACHMENT A BACKGROUND STATEMENT OIL USAGE BACKGROUND This case may involve an owner’s complaint about excessive oil use in a gasoline-fueled 1974-1979 [Volkswagen water-cooled engine] [Audi Fox or 5000].

Since 1981, the Federal Trade Commission (FTC) and [Volkswagen (VW)] [Volkswagen of America, the importer of Audi vehicles (Audi)] have been involved in an administrative lawsuit about allegations of excessive oil use in 1974 to 1979 [VW cars with water-cooled gasoline engines] [Audi Fox and 5000 vehicles]. The FTC has alleged that VW failed to tell consumers about an “abnormally high” number of en- VOLKSWAGEN OF AMERICA, INC., ET AL. 419 392 Decision and Order gine problems related to excessive oil consumption in these vehicles. [VW] [Audi] has denied this claim and has stated that it has at all times provided owners with more than sufficient information to operate and maintain their vehicles safely and economically. [VW] [Audi] and the FTC have now agreed to settle this dispute without further litigation.

As part of their settlement of this dispute, [VW] [Audi] and the FTC have agreed to allow such complaints to be submitted to mediation and arbitration. They have prepared this information sheet to give consumers, mediators and arbitrators potentially useful background facts. Some of these facts may not be widely known. OIL USAGE Like all automobile engines, the water-cooled engines in 1974-1979 {Volkswagen] [Audi] vehicles use lubricating oil to perform several vital functions. The rate of oil usage may vary widely, generally depending on several factors, including the design of the engine, its age and mechanical condition, the viscosity (or thickness) and quality of oil used, the maintenance and care given to the vehicle and the driving habits of the operator. [2] Internal oil consumption in gasoline-powered automobile engines usually occurs in one or more of three areas: past the “valve stem seals,” past the piston rings, or through the “crankcase breather system.” Sometimes, internal oil burning is evidenced by smoke coming from the tailpipe, but at other times no smoke is visible. At other times, tailpipe smoke may result from causes unrelated to oil consumption.

Automobile engineers do not agree on what precise rate of oil consumption is acceptable. Usually, however, gasoline automobile engines use slightly more oil during the initial break-in period of 5,000 to 10,000 miles than they will later. Then, until at least 50,000 miles, engines in good condition should have a roughly even rate of oil consumption, which can increase gradually because of normal wear and tear on internal engine parts. A sudden increase in oil consumption, or a substantial increase when the car has been driven less than 50,000 miles, usually means that a component has failed, the operator’s driving habits have changed, or that maintenance or care habits have been altered.

In controlled engineering tests conducted by [Volkswagen] [Audi] and others on prototype and production engines and complete vehicles, mechanically sound engines, tested over 50,000 miles or more used one quart or less of oil every 1,000-2,000 miles. Nevertheless, some water-cooled. engines in 1974~1979 [VW] [Audi] vehicles have experienced higher rates of oil consumption in actual customer use. Decision and Order 110 F.T.C.

The FTC claims that “high rates of oil consumption” were abnormally frequent in water-cooled gasoline fueled 1974-1979 [VW] [Audi] vehicles and that in cases where substantially increased rates of oil use have occurred at less than 50,000 miles in such vehicles, the most common cause of such increase has been leakage past failed valve stem seals.

[VW] [Audi] denies this claim and states that these vehicles in customer hands have experienced, on a worst case basis, a fleet average oil consumption rate, from whatever causes, of several thousand miles per quart. In mid-1979, [VW] [Audi] introduced a new valve stem seal using an improved material [in the Fox and 5000]. As is customary, the improved part was used for both original equipment and replacement parts.

The FTC contends that [VW’s] [Audi’s] 1979 valve stem seal change was made to alleviate the alleged excessive oil consumption in these vehicles. [3] ; [VW) [Audi] denies that this change was in any way different from the thousands of upgrades and improvements continually made to its vehicles on an ongoing basis. If increased oil consumption in an individual vehicle does occur past the valve stem seals, replacement of the seals is the appropriate repair. Valve stem seals can be replaced alone. Valve stem seals.are also replaced routinely, whenever a cylinder head is replaced or if a “valve job” is performed. Cylinder head replacement and valve jobs are more extensive repairs than valve stem seal replacement, alone. [Volkswagen] [Audi] dealers and independent mechanics have replaced cylinder heads and performed valve jobs in some cases in response to owner complaints of excessive oil usage on 1974-1979 [VW] [Audi Fox and 5000] vehicles.

The FTC claims that excessive oil consumption was abnormally frequent on these vehicles, and most often resulted from failed valve stem seals, and that VW did not inform. consumers and dealers of this problem. The FTC also contends that consumers and dealers were not told that valve stem seal replacement, alone, usually corrected the increased oil consumption. The FTC further claims that because mechanics had not been told this information, competent mechanics may have performed cylinder head replacements and valve jobs when valve stem seal replacement, alone, would have corrected the problem.

[VW] [Audi] denies that oil consumption or valve stem seal performance in its engines was in any way abnormal. VW further states that its owner’s and service publications have at all times provided customers with specific guidelines for identifying potential problems and dealers with the latest and most cost-effective procedures to diagnose and repair them properly. [VW] [Audi] therefore denies that competent mechanics have ever either misdiagnosed or deliberately overrepaired minor and simple conditions such as valve stem seal replacement, except in isolated cases. Normally, it is reasonable to expect valve stem seals in a properly maintained and used engine to provide reliable, durable service sub- VOLKSWAGEN OF AMERICA, INC., ET AL. 421 | 392 Decision and Order stantially beyond the warranty period. Claims of oil consumption related to alleged valve stem seal failure most often have occurred, in fact, after the expiration of the warranty. [4] Proper maintenance and use of a vehicle are important to the durability and reliability of all parts of an automobile engine, including valve stem seals. The manufacturer spells out in the owner’s manual recommended maintenance procedures, and discloses driving habits which should be avoided. However, valve stem seals have failed prematurely on some 1974-1979 [VWs] [Audi Foxes and 5000s] even with proper maintenance and use.

[Volkswagen’s] [Audi’s] limit for maximum permissible oil consumption in these vehicles is [Volkswagen: 2.5 qts./1,000 miles] [Audi: 2.5 qts./1000 miles for the Audi Fox and 2.9 qts./1000 miles for the Audi 5000]. The owner’s manuals for 1977-1979 model year watercooled [VW vehicles stated that “oil consumption can be up to 2.5 US. quarts per 1000 miles.”’] [Audi Fox vehicles stated that “oil consumption can be up to 2.5 qts./1000 miles (2.9 qts./1000 miles for the 5000).” These figures, however, are not a statement of expected normal or average oil consumption in these vehicles. [VOLKSWAGEN’S] [AUDI'S] WARRANTY [Volkswagen] [Audi] provides a limited warranty with each new [Volkswagen] [Audi] vehicle sold by one of its dealers. The warranty generally covers any repair and adjustment needed to correct defects in materials and workmanship within the warranty period. However, complaints may occur after the warranty. A manufacturer’s warranty is not necessarily the manufacturer’s only responsibility, and should not determine the outcome of this case. Likewise, [Volkswagen’s] [Audi’s] field guide for maximum permissible oil consumption need not dictate the outcome of this case. ATTACHMENT A100 BACKGROUND STATEMENT OIL USAGE BACKGROUND This case may involve an owner’s complaint about excessive oil use in a gasoline-fueled 1974-1977. Audi 100LS vehicle. Since 1981, the Federal Trade Commission (FTC) and Volkswagen of America, the importer of Audi vehicles, (Audi) have been involved in an administrative lawsuit about allegations of excessive oil use in 1974 to 1979 Audi cars with water-cooled gasoline engines. The FTC Decision and Order 110 F.T.C.

has alleged that Audi failed to tell consumers about an “abnormally high” number of engine problems related to excessive oil consumption in these vehicles. Audi has denied this claim and has stated that it has at all times provided owners with more than sufficient information to operate and maintain their vehicles safely and economically. Audi and the FTC have now agreed to settle this dispute without further litigation.

As part of their settlement of this dispute, Audi and the FTC have agreed to allow such complaints to be submitted to mediation and arbitration. They have prepared this information sheet to give consumers, mediators and arbitrators potentially useful background facts. Some of these facts may not be widely known. OIL USAGE Like all automobile engines, the water-cooled engines in 1974-1977 Audi 100 vehicles use lubricating oil to perform several vital functions. The rate of oil usage may vary widely, generally depending on several factors, including the design of the engine, its age and mechanical condition, the viscosity (or thickness) and quality of oil used, the maintenance and care given to the vehicle and the driving habits of the operator. [2] Internal oil consumption in gasoline-powered automobile engines usually occurs in one or more of three areas: past the valve guides and the “valve stem seals,” past the piston rings, or through the “‘crankcase breather system.” Sometimes, internal oil burning is evidenced by smoke coming from the tailpipe, but at other times no smoke is visible. At other times, tailpipe smoke may result from causes unrelated to oil consumption.

Automobile engineers do not agree on what precise rate of oil consumption is acceptable. Usually, however, gasoline automobile engines use slightly more oil during the initial break-in period of 5,000 to 10,000 miles than they will later. Then, until at least 50,000 miles, engines in good condition should have a roughly even rate of oil consumption, which can increase gradually because of normal wear and tear on internal engine parts. A sudden increase in oil consumption, or a substantial increase when the car has been driven less than 50,000 miles, usually means that a component has failed, the operator’s driving habits have changed, or that maintenance or care habits have been altered.

In controlled engineering tests conducted by Audi and others on prototype and production engines and complete vehicles, mechanically sound engines, tested over 50,000 miles or more used one quart or less of oil every 1,000-2,000 miles. Nevertheless, some water-cooled VOLKSWAGEN OF AMERICA, INC., ET AL. 423 392 Decision and Order engines in 1974-1977 Audi 100LS vehicles have experienced higher rates of oil consumption in actual customer use. The FTC claims that “high rates of oil consumption” were abnormally frequent in water-cooled gasoline fueled 1974-1977 Audi 100LS vehicles, at less than 50,000 miles. Audi denies this claim and states that these vehicles in customer hands have experienced, on a worst case basis, a fleet average oil consumption rate, from whatever causes, of several thousand miles per quart. When increased oil consumption occurred in individual Audi 100LS vehicles, various different repair operations were performed depending on the precise cause of the problem and the skill and judgment of the mechanic. These repairs included replacement of the cylinder head, of valve stem seals, of piston rings or a “valve job”. The FTC claims that excessive oil consumption was abnormally frequent on these vehicles and that Audi did not inform consumers and dealers of this problem. The [3] FTC also contends that consumers and dealers were not told that repairs were available to respond to this problem.

Audi denies that oil consumption in Audi 100LS vehicles was in any way abnormal, or that consumers or mechanics required any special information to identify and address any oil. usage issues arising with respect to any Audi 100LS vehicle. Audi further states that it has at all times provided specific guidelines for identifying potential problems with the latest and most cost-effective procedures to diagnose and repair them properly.

Proper maintenance and use of a vehicle are important to the durability and reliability of all parts of an automobile engine. The manufacturer spells out in the owner’s manual recommended maintenance procedures, and discloses driving habits which should be avoided. However, high rates of oil consumption have been encountered on some 1974-1977 Audi 100LS vehicles even with proper maintenance and use.

Audi’s limit for maximum permissible oil consumption in these vehicles is 2.9 qts./1000 miles for the Audi 100LS. The owner’s manuals for 1977 model year water-cooled Audi 100LS vehicles stated that “oil consumption can be up to 2.9 qts./1000 miles.” This figure, however, is not a statement of expected normal or average oil consumption in these vehicles.

AUDI’S WARRANTY Audi provides a limited warranty with each new Audi vehicle sold by one of its dealers. The warranty generally covers any repair and adjustment needed to correct defects in materials and workmanship within the warranty period. However, complaints may occur after the warranty. A manufacturer’s warranty is not necessarily the manufac- Decision and Order 110 F.T.c.

turer’s only responsibility, and should not determine the outcome of this case. Likewise, Audi’s field guide for maximum permissible oil consumption need not dictate the outcome of this case. ATTACHMENT B BACKGROUND STATEMENT ENGINE DAMAGE FROM LACK OF OIL NOTICE: Please read the attached “Oil Usage” Background Statement, if this case also involves a claim of excessive oil usage or consumption. It may contain useful facts for this case. BACKGROUND This case may involve an owner’s complaint about engine damage from lack of oil in a gasoline-fueled 1974-1979 [Volkswagen] watercooled engine] [Audi Fox or 5000].

Since 1981, the Federal Trade Commission (FTC) and [Volkswagen (VW)] [Volkswagen of America, Inc., the importer of Audi vehicles (Audi)] have been involved in an administrative lawsuit which includes allegations of excessive oil consumption and engine damage from lack of oil in 1974 to 1979 [VW cars with water-cooled gasoline engines] [Audi Fox and 5000 vehicles]. The FTC has alleged that [VW] [Audi] failed to tell consumers about an “abnormally high” number of engines damaged from lack of oil in these vehicles. [VW] [Audi] has denied this claim and has stated that it has at all times provided owners with more than sufficient information to operate and maintain their vehicles safely and economically. [VW] [Audi] and the FTC have now agreed to settle this dispute without further litigation. As part of their settlement of this dispute, [VW] [Audi] and the FTC have agreed to allow such complaints to be submitted to mediation and arbitration. They have prepared this statement and the attached statement to give consumers, mediators and arbitrators potentially useful background facts. Some of these facts may not be widely known.

ENGINE DAMAGE FROM LACK OF OIL Like other automobile engines, the [Volkswagen water-cooled] [Audi] engine will be severely damaged if it is run without sufficient lubricating oil circulating within the engine. Engine components which can be damaged in this manner include connecting rods, crankshaft, bearings and the engine block itself. [2] VOLKSWAGEN OF AMERICA, INC., ET AL. 425 392 Decision and Order Whether a particular automobile engine is damaged from lack of oil depends on three factors: the engine’s rate of oil consumption, its effective crankcase capacity, and the intervals at which its oil level is checked and replenished.

Over the life of the engine (100,000 miles or more), the amount of oil consumed by individual 1974-1979 [VW] [Audi] vehicles has varied widely at various times from less than one quart per 7,500 miles (the oil change interval), to more than one quart per 400 miles ((VW’s] [Audi’s] maximum usage figure (345 miles for the 5000), which was published in 1977-1979 model year vehicle owner’s literature). [Starting with a full crankcase, Rabbit and Scirocco engines can consume approximately three quarts of oil (Dasher - 2.5 quarts) without checking and refilling the oil before engine damage becomes an immediate risk. The maximum cruising range of these vehicles per tankful of gasoline, based on EPA mileage estimates, is approximately 275 miles. ] [Starting with a full crankcase, the Audi vehicles can consume approximately the following amounts of oil without checking and refilling the oil before engine damage becomes an immediate risk: Fox 2.5 quarts 5000 4.1 quarts The approximate maximum distance which these vehicles can be driven per tankful of gasoline, based on EPA mileage estimates, is as follows:

Fox 335 miles 5000 (1978) 290 miles (1979) 380 miles During the period 1974-1979 and thereafter, [Volkswagen] [Audi] received reports that a number of engines in its vehicles had been damaged from insufficient oil.

Between 1974 and 1979, [Volkswagen] [Audi] modified the recommendations in its owner’s literature that operators of its vehicles check the oil level at periodic intervals as follows: - 1974-76 owner’s manuals stated “the engine oil level should be checked from time to time”;

- 1977-78 owner’s manuals stated: “make it a habit to have the engine oil level checked with every second fuel filling”; [3] - 1979 owner’s manuals stated: ‘make it a habit to have the engine oil level checked with every fuel filling”;

- 1978-1979 Warranty and Maintenance booklets repeated the above advice on oil checking intervals and included statements as to the consequences of lack of sufficient engine oil.

Decision and Order ~ 110 F.T.C.

[Volkswagen only: Volkswagen sent a letter to owners of 1975-1979 Rabbits and Sciroccos (Dasher owners did not receive this letter) to remind them to check the oil level with every fuel filling. The letter was sent to owners of standard transmission cars in approximately August 1979 and to owners of automatic transmission cars in approximately June 1980. Dealers were also told in August 1979 to attach a sticker reading “Check Engine Oil” around the fuel filler neck under the gas cap of each vehicle they serviced.] The FTC claims that the information contained in the owner’s manuals, [and] maintenance booklets [.] [, letter to consumers, and sticker] was insufficient to alert owners to the risk of serious engine damage from lack of oil. The FTC says that oil consumption in 1974-1979 water-cooled gasoline engines could unexpectedly increase because of deteriorating valve stem seals, and that [VW] [Audi] did not inform owners of this fact. The FTC also says that such an oi] consumption increase, if undetected, could lead to severe engine damage from lack of oil, and the FTC claims that [VW] [Audi] did not tell consumers of these facts as well. [VW] [Audi] says that the information and recommendations in its owner’s literature [and communications] were significantly more detailed than those of any other manufacturer and were more than sufficient to prevent any engine damage. [VW] [Audi] denies that oil consumption or valve stem seal performance in its engines was in any way abnormal. [VW] [Audi] says that lubrication-related engine failures were not caused by oil consumption, but by insufficient oil level maintenance, compounded by a large increase in self-service gas stations in the 1970’s. The oil pressure warning light in automobiles is not specifically designed to measure oil level. Therefore, under some operating conditions, the engine may be damaged from low oil level before the oil pressure drops sufficiently to activate the dashboard light. [4] During the late 1970’s, [Volkswagen] [Audi] received reports that some customers who complained of engine damage from lack of oil may have-in fact been relying on their dashboard warning lights, rather than their oil dipsticks, to monitor the crankcase oil levels in their cars.

Prior to 1979, all [VW] [Audi] owner’s manuals stated that, if the oil pressure warning light comes on while driving, the driver should stop at once, turn the engine off, check the oil level and replenish, if necessary, and not operate the vehicle if the warning light remains on while the engine is restarted. In the 1979 model year, Volkswagen first included additional language, which had not previously appeared in its owner’s manuals. This new language stated specifically that the oil pressure warning light is not an oil level indicator and that the dipstick is the proper means of checking the oil level. VOLKSWAGEN OF AMERICA, INC., ET AL. 427 392 Decision and Order [VOLKSWAGEN’S] [AUDI'S] WARRANTY [Volkswagen] [Audi] provides a limited warranty with each new [Volkswagen] [Audi] vehicle sold by one of its dealers. The warranty generally covers any repair and adjustment needed to correct defects in materials and workmanship within the warranty period. However, complaints may occur after the warranty, including complaints of engine damage from lack of oil. A manufacturer’s warranty is not necessarily the manufacturer’s only responsibility, and should not determine the outcome of this case.

ATTACHMENT B100 BACKGROUND STATEMENT ENGINE DAMAGE FROM LACK OF OIL NOTICE: Please read the attached “Oil Usage” Background: Statement, if this case also involves a claim of excessive oil usage or consumption. It may contain useful facts for this case. BACKGROUND This case may involve an owner’s complaint about engine damage from lack of oil in a gasoline-fueled 1974-1977 Audi 100LS watercooled engine.

Since 1981, the Federal Trade Commission (FTC) and Volkswagen of America, the importer of Audi vehicles (Audi) have been involved in an administrative lawsuit which includes allegations of excessive oil consumption and engine damage from lack of oil in 1974 to 1979 Audi cars with water-cooled gasoline engines. The FTC has alleged that Audi failed to tell consumers about an “abnormally high” number of engines damaged from lack of oil in these vehicles. Audi has denied this claim and has stated that it has at all times provided owners with more than sufficient information to operate and maintain their vehicles safely and economically. Audi and the FTC have now agreed to settle this dispute without further litigation. As part of their settlement of this dispute, Audi and the FTC have agreed to allow such complaints to be submitted to mediation and arbitration. They have prepared this statement and the attached statement to give consumers, mediators and arbitrators potentially useful background facts. Some of these facts may not be widely known.

Decision and Order 110 F.T.C.

ENGINE DAMAGE FROM LACK OF OIL Like other automobile engines, the Audi 100LS engine will be severely damaged if it is run without sufficient lubricating oil circulating within the engine. Engine components which can be damaged in this manner include connecting rods, crankshaft, bearings and the engine block itself. [2] Whether a particular automobile engine is damaged from lack of oil depends on three factors: the engine’s rate of oil consumption, its effective crankcase capacity, and the intervals at which its oil level is checked and replenished.

Over the life of the engine (100,000 miles or more), the amount of oil consumed by individual 1974-1977 Audi 100LS vehicles has varied widely at various times from less than one quart per 7,500 miles (the oil change interval), to more than one quart per 345 miles (Audi’s maximum usage figure, which was published in the 1977 model year vehicle owneyr’s literature).

Starting with a full crankcase, the Audi 100LS engine can consume approximately 3.1 quarts of oil without checking and refilling the oil before engine damage becomes an immediate risk. The maximum cruising range of these vehicles per tankful of gasoline, based on EPA mileage estimates, is approximately 350 miles. During the period 1974-1977 and thereafter, Audi received reports that a number of engines in its vehicles had been damaged from insufficient oil.

Between 1974 and 1977, Audi modified the recommendations in its owner’s literature that operators of its vehicles check the oil level at periodic intervals as follows:

- 1974-76 owner’s manuals stated “the engine oil level should be checked from time to time”;

- 1977 owner’s manuals stated: “make it a habit to have the engine oil level checked with every second fuel filling”.

The FTC claims that the information contained in the owner’s manuals was insufficient to alert owners to the risk of serious engine damage from lack of oil. The FTC says that oil consumption in 1974-1977 Audi 100 LS water-cooled gasoline engines could unexpectedly increase, and that Audi did not inform owners of this fact. The FTC also says that such an oil consumption increase, if undetected, could lead to severe engine damage from lack of oil, and the FTC claims that Audi did not te]l consumers of these facts as well.

Audi says that the information and recommendations in its owner’s literature were significantly more detailed than those of any other manufacturer and were more than sufficient to prevent any engine damage. Audi denies [3] that oil consumption performance in its engines was in any way abnormal. Audi says that lubrication-related engine failures were not caused by oil consumption, but by insufficient oil level maintenance, compounded by a large increase in self-service gas stations.in the 1970's. VOLKSWAGEN OF AMERICA, INC., ET AL. 429 392 Decision and Order The oil pressure warning light in automobiles is not specifically designed to measure oil level. Therefore, under some operating conditions, the engine may be damaged from low oil level before the oil pressure drops sufficiently to activate the dashboard light. During the late 1970’s, Audi received reports that some customers who complained of engine damage from lack of oil may have in fact been relying on their dashboard warning lights, rather than their oil dipsticks, to monitor the crankcase oil levels in their cars. Prior to 1979, all Audi owner’s manuals stated that, if the oil pressure warning light comes on while driving, the driver should stop at once, turn the engine off, check the oil level and replenish, if neces- _ sary, and not operate the vehicle if the warning light remains on while the engine is restarted.

AUDI’S WARRANTY Audi provides a limited warranty with each new Audi vehicle sold by one of its dealers. The warranty generally covers any repair and adjustment needed to correct defects in materials and workmanship within the warranty period. However, complaints may occur after the warranty, including complaints of engine damage from lack of oil. A manufacturer’s warranty is not necessarily the manufacturer’s only responsibility, and should not determine the outcome of this case. ATTACHMENT C SPECIAL MODIFIED RULES FOR THE ARBITRATION OF VOLKSWAGEN AND AUDI INTERNAL ENGINE COMPONENT CLAIMS.

1. DEFINITIONS A. “Arbitration” is a process in which two or more persons agree to let an impartial person or panel decide their dispute. This decision becomes legally binding when the consumer accepts the decision, subject to any state law that may provide a limited right of appeal. You may compel compliance with the decision under any applicable state law.

B. “You”, as used in these Rules, means one of the parties involved in the dispute being arbitrated.

C. “BBB” means the Better Business Bureau which is administering the Arbitration. “CBBB” is the Council of Better Business Bureaus.

D. “Arbitrator” refers to the individual or panel selected to conduct your arbitration and make a decision on your dispute. Decision and Order 110 F.T.C.

E. “Days”, as referred to in these rules, shall mean calendar days. F. “Shall”, as used in these Rules is mandatory; “may” is discretionary.

G. “Decision” means the written document signed by the arbitrator and mailed to the consumer.

1) “Final Decision” might award a repurchase, a replacement, a reimbursement for past repairs, or nothing at all. In these cases, an Arbitrator has no further authority over the execution of the decision. 2) “Interim Decision” - When the decision requires action to be performed, an interim decision may be written. In these cases, Arbitrators maintain continuing authority over the execution of their decisions until the actions are completed to their satisfaction. All decisions directing repairs shall be interim. [2] H. “Disputes” that may be arbitrated under these special rules are limited to disagreements between the manufacturer and a customer involving the claimed failure, malfunction, repair, or replacement of internal engine components in a Volkswagen or Audi vehicle distributed by Volkswagen of America, warranted in writing by Volkswagen of America, or certified by the manufacturer as meeting applicable federal safety and emissions standards. These disputes do not include: 1) reimbursements for such things as loss of wages, business income, depreciation or loss of value, permanent. replacement transportation, or any other consequential damages, unless all the parties agree specifically in writing that the arbitrator may consider such an item; 2) claims which exceed the cash purchase price of the product involved in the dispute, (plus expenses for towing, storage fees, rental car costs, telephone and hotel bills) unless all parties agree specifically in writing that the Arbitrator may consider other costs of purchase; 3) claims involving cars or trucks which are no longer owned or leased by the consumer at the time the claim was referred to the BBB (if you plan to sell the car before the hearing is held, you must follow the special procedures described in Rule 29); 4) claims covered by insurance, punitive damages, or claims for mental anguish or personal injury. Expenses for towing, storage fees, rental car costs, telephone and hotel bills may be included in the claim to be arbitrated. The Arbitrator has no authority to decide that a party or parties violated any law or to consider matters which cannot be arbitrated under the law. In making any award for reimbursement, repair or repurchase, the Arbitrator may consider requests for deductions based on such factors as owner usage, mileage, overall condition of the product and optional equipment. The decision as to whether: your dispute or any part of your dispute is arbitrable under these rules, or is within the scope of your “Agreement to Arbitrate” rests with either VOLKSWAGEN OF AMERICA, INC., ET AL. 431 392 Decision and Order BBB and CBBB, subject to the terms of the agreement between Volkswagen and the FTC under which this program is being conducted. I. “Internal Engine Components” means all gasoline and diesel engine parts, components, and subassemblies included within the complete short block and cylinder head assemblies, including short blocks and cylinder heads, camshafts, valve train components, timing gears, flywheels, pistons, piston rings, crankshafts, connecting rods, and bearings, oil pumps, and associated fasteners, seals and gaskets. [3] 2. APPLICATION OF THESE RULES These special rules apply to any dispute described under the definition of “Disputes” which you agree to arbitrate through the BBB. You must accept these rules when you sign the “Agreement to Arbitrate” form.

3. THE LEGAL BASIS FOR BBB AUTO LINE BBB AUTO LINE is an informal forum based on the United States Arbitration Act, 9 U.S.C. 1-14, and administered under procedures © consistent with state law. The BBB at all times reserves the right to discontinue administration of arbitration for any case(s) due to a conflict with any state or federal law or regulation. To the extent that any party wants to challenge or enforce an Arbitrator’s decision, a court of competent jurisdiction shall be the proper forum. The BBB accepts no responsibility for costs incurred by either party in challenging or enforcing any decision. 4. AGREEMENT TO ARBITRATE The BBB shall prepare an Agreement to Arbitrate, briefly describing the “nature of the dispute” and “decision sought” as viewed by you and any other party.

This Agreement to Arbitrate is intended to be a general outline of the dispute and is not an argument of your case. If you agree with the general description of your side of the dispute and the decision you seek, sign the Agreement to Arbitrate and return it to the BBB within five (5) days of receiving it. If you disagree with the general description of your case, contact the BBB at once. You should not contact the BBB if you think the description of the other party’s case is in error; that is an issue for your Arbitrator to decide. 5. SELECTING YOUR ARBITRATOR The BBB will maintain a pool of individuals who have volunteered to serve, at no pay, as Arbitrators in this program. These volunteers have been trained to conduct a hearing and make a decision in accordance with these rules; but they do not necessarily have mechanical or Decision and Order 110 F.T.C.

legal expertise. Arbitrators will be selected from this pool in the following way:

The BBB will provide the customer with a list of Arbitrators chosen from the volunteer pool, together with brief biographies of each. After receiving this list, the [4] customer will have five days to cross off any name with whom a financial, competitive, professional or social relationship exists and assign priorities to those remaining (#1, #2, #3, etc.). If you do not return the list within five days the BBB will assurne all names are satisfactory to you and assign one of the Arbitrators on your list to hear your case.

This selection process may take place in a phone call from the BBB to the consumer, unless the consumer requests that the procedure prescribed in the preceding paragraph be used instead. If by telephone, the BBB will read the names and biographies of a list of volunteer Arbitrators, check for potential conflicts of interest and the customer will then assign priorities to the list of volunteer Arbitrators.

Whether the selection process is conducted by telephone or in writing, every effort will be made to provide the customer with the highest choice available. Once an Arbitrator selected has been confirmed with the parties, any substitute must either be approved by the customer or the selection process must be conducted again. The BBB may use variations of this selection process; however, any alternative procedure shall be designed to avoid any conflict of interest, provide the customer a selection and be approved by the CBBB. VWOoOA will take no part in the selection of the Arbitrator. 6. COMMUNICATING WITH THE ARBITRATOR You or anyone representing you shall not communicate in any way with the Arbitrator about your dispute except at the inspection or hearing where the other party has received notice, or unless all other parties are present or have given us their written permission. All other communications about your case with the Arbitrator must be sent through the BBB, which must share them with the other parties. Any communications with the Arbitrator not directed through the BBB will be a violation of this rule and your case may be discontinued. 7. QUALIFYING THE ARBITRATOR The Arbitrator shall sign a special oath, pledging to make an unbiased decision in your dispute.

If a financial, competitive, professional, family or social relationship exists and no impartial decision is possible, the Arbitrator shall refuse to serve. Even if the Arbitrator believes the relationship is so VOLKSWAGEN OF AMERICA, INC., ET AL. 433 892 Decision and Order minor as to have no effect on the decision, it shall be revealed to everyone; and you may decide [5] against this Arbitrator serving in your case. The BBB reserves the right to reject any Arbitrator for any conflict which it believes will affect the program’s credibility. 8. YOUR REPRESENTATIVE In any arbitration procedure, you may present your own case or have someone represent you. If your representative is a lawyer, you must give the lawyer’s name and address to the BBB at least eight (8) days before the hearing. The BBB will notify the other parties so they have an opportunity to obtain a lawyer if they want. Your failure to give the BBB advance notice may result in a rescheduling of your hearing. You are responsible for any fees charged by your representatives.

9. INSPECTION BY THE ARBITRATOR You or the Arbitrator may request an inspection of the product or service involved in your dispute. The BBB will always schedule an inspection when a consumer seeks a repurchase or replacement of their vehicle, unless all parties agree in writing that such an inspection is not necessary. If possible, the inspection will be performed as part of the hearing, otherwise, the inspection will be scheduled for a later date and all parties will receive at least eight (8) days notice unless waived by all parties.

If the BBB has scheduled an inspection and the vehicle is not available, no decision shall be made in your case. 10. TECHNICAL ADVISERS At the request of the Arbitrator, the BBB will make every effort to obtain a neutral technical adviser to inspect your car. At the BBB’s option, the adviser’s findings will be presented in writing or in person either before, during, or after the hearing. In any case, you will have an opportunity to evaluate and comment on the qualifications and findings of the adviser. You also have the right to get your own technical adviser to serve as your witness at your own expense. __ 11. HEARING NOTICE The BBB will set a time (during normal business hours) and place for your arbitration hearing, with due regard for your convenience, and that of the Arbitrator, and will notify you in writing at least eight (8) days in advance of the hearing. Contact the BBB at once if you cannot attend. If you object to the time or place stated in your notice, contact the BBB immediately and let them know. If you do not object or if you attend the hearing, your acceptance of the notice will be Decision and Order 110 F.T.C.

assumed. If our offices are very far from your home, we will [6] arrange for a hearing facility as close to your home as is reasonably possible.

12. WRITTEN OR TELEPHONE HEARINGS Although most arbitrations involve in-person hearings, the BBB, at your request, may arrange to have your statement and evidence presented by telephone or in writing. If you appear in person, Volkswagen may present its case in person, by telephone, or in writing. If you present your case by telephone, Volkswagen may present its case by telephone or in writing. If you present your case in writing, Volkswagen must also present its case in writing. You always have the right to be present at your arbitration hearing. You also have the right to review and respond to any information submitted by Volkswagen. 13. ATTENDANCE AT HEARINGS The BBB has the option to arrange for volunteers from our pool of Arbitrators or for governmental representatives to attend arbitration hearings.

For any other observer to attend a hearing, the BBB will first determine that reasonable accommodations exist and then make sure that neither the customer nor the Arbitrator objects to the presence of an observer. If there is room and no objection, the observer shall be subject to the BBB’s directions regarding proper conduct. 14. MEDIA PRESENCE IN THE HEARING Media shall be permitted access to arbitration hearings on the same basis as other observers. Unless there is approval of all parties and the Arbitrator, neither media representatives nor any other observer may be permitted to bring cameras, lights, recording, or any other equipment into the hearing. Under these circumstances, all observers, including media representatives, shall be limited to note taking, and shall be subject to the BBB’s directions regarding observers’ proper conduct that will not affect your right to present your case. 15. YOUR ABSENCE FROM THE HEARING If you do not attend a hearing after receiving proper notice from the BBB, the Arbitrator may decide to go ahead with the hearing in your absence. Your absence does not mean an automatic decision against you, and you shall be given an opportunity to present your case in a time and manner set by the Arbitrator. If you then fail to present your case, the Arbitrator may make a decision without your presentation. [7] VOLKSWAGEN OF AMERICA, INC., ET AL. 435 892 Decision and Order 16. RECORD OF HEARING The BBB will maintain basic file information on your arbitration hearing, such as the witnesses’ names and documents presented as evidence at the hearing. Copies of this and other official arbitration forms relating to your case will be given to you on request. A reasonable copying fee may be charged.

If you give the BBB at least 5 days advance notice, the BBB will arrange for a court reporter at your expense or will audio tape your hearing and, for reasonable copying and transmittal costs, give you a copy. Copies shall also be given to other parties and to the Arbitrator at your expense. The Arbitrator may request the BBB tape a hearing at any time.

All taping or other records of an arbitration hearing are the BBB’s sole responsibility and no other person shall make such a record at any time.

17. INTERPRETERS If you need an interpreter for your arbitration and can not provide your own, contact the BBB and it will make every effort to find a volunteer interpreter.

18. OATH OF PARTICIPANTS You and your witnesses shall be placed under oath at the hearing. 19. HEARING PROCEDURES The Arbitrator will decide on the order and procedures for you to present your side of the dispute. You will be given an opportunity to make a personal presentation of your case, as well as present any witnesses and evidence in support of your case. You may also question the other parties, their witnesses and their evidence. After everyone has given their presentation, you will be given an opportunity to make a closing statement. When the Arbitrator is satisfied that all testimony and evidence have been presented, your hearing will be closed. If you prepare any part of your case in writing for the arbitration, the other party will have an opportunity to see your statement and submit a response to the BBB which will forward both statements to the Arbitrator.

20. ADMISSION OF EVIDENCE AT THE HEARING Legal rules of evidence do not apply to an arbitration. However, you should be sure your evidence is true and relevant to your case. [8] The Arbitrator can limit your presentation if it is repetitious or irrelevant.

Decision and Order 110 F.T.C.

21. ABSENTEE STATEMENTS If you have a witness who cannot attend the hearing, you may present that person’s written statement to the Arbitrator. You must make a copy for the other party to read and use for response. Before the Arbitrator makes a decision, you may ask the Arbitrator to give you a reasonable number of days to respond to a written statement presented by the other party, and the Arbitrator may grant that request at his discretion.

22. SUBPOENA POWERS If you have a reason to believe the other side will not present certain witnesses or evidence which you consider important to a full and fair consideration or dispute, you may send the BBB a request that the Arbitrator subpoena these witnesses or evidence. If the Arbitrator agrees with your request, a subpoena will be sent according to state law.

23. POST-HEARING ADMISSION OF EVIDENCE Prior to a decision, an Arbitrator may schedule new or additional hearings or otherwise request or allow new or additional evidence in order to get all possible facts relating to your dispute. Before a decision is made, you may send the BBB new information that was impossible to present at your original hearing and request that it be considered. The BBB will share it with the other parties for their response and forward it to the Arbitrator. After the Arbitrator has made a decision in your case, no more arguments or evidence may be presented, even if newly discovered or not available at the time of the hearing.

24. SETTLEMENT If you and the other parties voluntarily decide to settle your dispute before the hearing, the settlement will end your dispute and no hearing will be held. You should be sure you are satisfied with the settlement. If Volkswagen agrees to pay you money as part of a voluntary settlement, it must send you a check within 45 days; any repair agreed to under a voluntary settlement must be completed within 30 days. Be sure to let the BBB know about it so the BBB can verify it was done within the time promised. If your voluntary settlement occurs during the hearing, the Arbitrator shall include the settlement in the final decision. If your settlement occurs after the hearing but before [9] the Arbitrator’s final decision, be sure to notify the BBB at once. VOLKSWAGEN OF AMERICA, INC., ET AL. 437 392 Decision and Order 25. TIME LIMITS The BBB shall complete an arbitration hearing within 60 days after receipt of “all information” necessary for the BBB to process your complaint, regardless of whether you try mediation first. (For automotive complaints, “all information” is the make, model, year, vehicle identification number, description of the problem, and your requested solution to the problem). These time deadlines may only be extended for delays caused by you.

26. THE DECISION A. Time The Arbitrator will forward to the BBB a final decision, or an interim decision where appropriate, within ten (10) days of closing your hearing. In cases where an interim decision has been rendered, and the consumer notifies BBB that the repair ordered in the interim decision was not performed or was performed unsatisfactorily, the Arbitrator will have 30 days from the date the consumer notifies the BBB of that fact to forward a final decision. Upon the Arbitrator’s request, the BBB may extend this time for special circumstances. If you have been asked or allowed by the Arbitrator to furnish additional evidence in support of your case, the Arbitrator will set a time for you to send it to the BBB which shall seek a response to your evidence from the other party and send everything to the Arbitrator. Receipt of these additional materials by the Arbitrator shall signal the start of the ten-day decision period. The BBB will mail you a copy of the Arbitrator’s decision but will not read a decision to you over the telephone.

B. Scope A decision shall be one that:

1) the Arbitrator considers fair; and 2) falls within the scope of your “Agreement to Arbitrate”. The decision may order an action to be performed, money to be paid, or any combination of these remedies. It may give you all or part of what you seek. Or it may be a decision in which the Arbitrator feels fairness requires no payment or performance at all. [10] C. Clarifying or Correcting the Decision If you do not understand what the Arbitrator has written, you should immediately inform the BBB in writing to request clarification. If you believe the decision contains a mistake of fact, a miscalculation of figures, or exceeds the Arbitrator’s authority, inform the BBB in writing of your position immediately. Decision and Order 110 F.T.C.

A “mistake of fact” is not a conclusion of the Arbitrator with which you disagree; it is a true error in such things as a date, time, place, or name, and may only justify a clarification or correction if it concerns the essence of the decision.

A “miscalculation of figures” is not a dollar figure you consider to be unfair; it is an arithmetic error. The “Arbitrator’s authority” is limited to the scope of the Agreement to Arbitrate. The BBB will not accept a clarification or correction request attempting to reargue your case, or based upon your disagreement or disappointment with the decision. If your written statement to the BBB is a valid request for clarification or correction of the decision, the BBB will share your position with the other party, solicit their views and send it to the Arbitrator, who may accept it in whole, in part, or reject it altogether. The Arbitrator may only clarify the intent or correct mistakes in the original decision, not change the substance of that decision.

D. Decision is Impossible to Perform If you believe you cannot perform the Arbitrator’s decision within the established time limit or at all, this should be put in writing at once and sent to the BBB. We shall handle your submission in the same manner as a request for correction or clarification. The Arbitrator may request additional evidence, may request another hearing, or | may do anything necessary to confirm or deny your allegation of impossibility of performance. If the CBBB confirms such impossibility the original decision may then be changed. _ If the manufacturer has exceeded the time for performance specified in the Decision, notify the BBB in writing. The BBB will immediately contact the manufacturer and Arbitrator. If the Arbitrator determines that the manufacturer is performing in good faith and that the delay is reasonable, the manufacturer’s time performance may be extended. If the consumer contests this determination, they are free to go to court to challenge or confirm the award. [11] E. Suspending the Time to Perform If you submit to the BBB a written statement to the BBB relating to correction, clarification, or impossibility to perform the decision, the time for acceptance and performance of a decision shall be suspended until the issue is resolved by the Arbitrator or by the BBB. F. Reasons for Decision An Arbitrator shall include reasons for a decision, either in the decision or in an accompanying form, and the BBB will forward the reasons to all parties along with the decision. VOLKSWAGEN OF AMERICA, INC., ET AL. 439 392 Decision. and Order Your written request for clarification or correction of a decision may not be based upon the reasons for the decision, but must be based on the decision alone.

G. Acceptance or Rejection of the Decision The BBB will send the Arbitrator’s decision to you, the consumer, for acceptance or rejection. If you accept the decision, Volkswagen will be legally bound to abide by the decision. If Volkswagen is ordered to pay you money, it must send you a check within 45 days; any repair that is ordered must be completed within 30 days except that the Arbitrator may modify the deadline for repair for good cause. shown at the hearing.

You, too, will be legally bound, which means you give up any right to sue Volkswagen in court on any claim that fails within the scope of your arbitration, unless Volkswagen fails to perform according to’ the Arbitrator’s decision. (If this should happen, first notify the BBB; however, you may legally enforce the decision or pursue other legal remedies under state or federal law should such a failure occur.) If you reject the decision: you may pursue other legal remedies under state or federal law; Volkswagen will not be obligated to perform any part of the decision; and depending on federal or state law the decision may be introduced as evidence by you or Volkswagen in any civil court action relating to any matter considered in your arbitration hearing. [12] NOTE: Your failure to accept or reject the decision within 14 days will be considered a rejection.

H. Confidentiality of Proceedings It is BBB policy that the mediation and arbitration process is private and confidential. The BBB will not release the results of your individual case to the media or any other group or organization. The BBB may release records when all parties agree or when such release is required by law or pertinent to judicial or governmental administrative proceedings. The Federal Trade Commission may also receive records of arbitration proceedings.

I. Verification of Performance If a decision is accepted, Volkswagen must do what the decision requires within the time limits stated. Unless otherwise stated in the decision, the time for performance begins when the BBB received written notice of the acceptance. When this time limit is up, the BBB must contact the consumer within two weeks of when VW was supposed to perform to be sure Volkswagen has performed. Decision and Order 110 F.T.C.

27. FAILURE TO COMPLY WITH RULES Any failure to follow these rules that may significantly affect the independence, impartiality, fairness or expeditiousness of the mediation or arbitration process should be raised with the Better Business Bureau at the earliest opportunity. Any party raising such objections should attempt to document the specific harm caused by the failure to follow these rules. The BBB may request that you put your objection in writing. If the BBB rules against your objection, it may continue processing your case. If you are not satisfied with the BBB’s ruling, you may contact the Federal Trade Commission, Division of Enforcement, Washington, D.C. 20580.

28. INTERPRETATION OF RULES The BBB will not advise the Arbitrator or make a statement on matters relating to the merits of your case or the reasonableness of the decision. The CBBB will make the decision on procedural questions, the scope of the agreements, and other questions concerning the application and interpretation of these rules, subject to the terms of the agreement between Volkswagen and the Federal Trade Commission under which this program is being conducted. [13] 29. SPECIAL REQUIREMENTS IF VEHICLE SOLD BEFORE HEARING If you decide to sell your vehicle after you file your claim with the BBB, but before the hearing, the following special provisions apply: A. You must notify Volkswagen at least ten days in advance of the sale that you intend to sell the vehicle;

B. You must give Volkswagen an opportunity to inspect the vehicle before it is sold;

C. If you sell the vehicle before the problem that prompted the claim is repaired, your recovery will be limited to the estimated repair costs (plus expenses for towing, storage fees, rental car costs, telephone and hotel bills);

D. If you arbitrate a claim for an unrepaired problem on a car that you sold, the party that bought the car is not eligible for arbitration for that problem. Likewise, you may not arbitrate a claim for which a previous owner has already accepted an arbitration award. VOLKSWAGEN OF AMERICA, INC., ET AL. 441 392 Decision and Order ATTACHMENT D SPECIAL MODIFIED RULES FOR THE ARBITRATION OF VOLKSWAGEN AND AUDI OIL RELATED CLAIMS 1. DEFINITIONS A. “Arbitration” is a process in which two or more persons agree to let an impartial person or panel decide their dispute. This decision . becomes legally binding when the consumer accepts the decision, subject to any state law that may provide a limited right of appeal. You may compel compliance with the decision under any applicable state law.

B. “Yow”, as used in these Rules, means one of the parties involved in the dispute being arbitrated.

C. “BBB” means the Better Business Bureau which is administering the arbitration. “CBBB” is the Council of Better Business Bureaus.

D. “Arbitrator” refers to the individual or panel selected to conduct your arbitration and make a decision on your dispute. E. “Days”, as referred to in these Rules, shall mean calendar days. F. “Shall”, as used in these Rules is mandatory; “may” is discretionary.

G. “Decision” means the written document signed by the Arbitrator and mailed to the consumer.

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4 1 779 1905 169 32 96.666832 decisions5 1 6 2 4 2 969 1902 92 33 96.922554 until5 1 6 2 4 3 1081 1902 61 32 96.948875 thes 1 6 2 4 4 1163 1902 133 32 96.509354 actions5 1 6 2 4 5 1317 1911 60 21 96.509354 ares 1 6 2 4 6 1398 1898 192 40 96.479172 completed5 1 6 2 4 7 1610 1900 35 29 96.932533 to5 1 6 2 4 8 1666 1896 93 33 96.171623 theirs 1 6 2 4 9 1780 1895 226 34 96.607948 satisfaction.5 1 6 2 4 10 2027 1893 58 33 96.561119 All4 1 6 2 5 0 779 1949 840 44 -1 5 1 6 2 5 1 779 1955 169 32 96.794510 decisions5 1 6 2 5 2 965 1953 171 40 96.567520 directing5 1 6 2 5 3 1151 1952 134 40 96.327049 repairs5 1 6 2 5 4 1302 1950 90 34 96.907745 shall5 1 6 2 5 5 1408 1950 42 32 97.017189 be5 1 6 2 5 6 1467 1949 152 32 96.396919 interim.3 1 6 3 0 0 779 1995 1314 553 -1 4 1 6 3 1 0 820 1995 1266 50 -1 5 1 6 3 1 1 820 2006 43 32 92.802315 H.5 1 6 3 1 2 883 2004 201 41 93.454544 “Disputes”5 1 6 3 1 3 1094 2003 80 32 96.548935 that5 1 6 3 1 4 1186 2013 82 29 96.992142 may5 1 6 3 1 5 1279 2001 42 33 93.273392 be5 1 6 3 1 6 1335 1999 192 35 93.258209 arbitrated5 1 6 3 1 7 1540 1998 112 34 96.850006 under5 1 6 3 1 8 1664 1998 99 32 96.343704 these5 1 6 3 1 9 1777 1996 127 41 96.343704 specials 1 6 3 1 10 1918 1995 94 33 97.002838 rules5 1 6 3 1 11 2026 2004 60 24 97.011925 area 1 6 3 2 0 779 2046 1307 47 -1 5 1 6 3 2 1 779 2055 135 33 96.316216 limited5 1 6 3 2 2 929 2058 36 29 97.008545 to5 1 6 3 2 3 979 2054 274 39 96.361168 disagreements5 1 6 3 2 4 1267 2052 157 32 95.880295 between5 1 6 3 2 5 1438 2050 61 33 96.289200 thes 1 6 3 2 6 1513 2048 265 34 96.843018 manufacturers 1 6 3 2 7 1792 2046 70 34 96.487946 ands 1 6 3 2 8 1876 2057 22 22 96.912361 a5 1 6 3 2 9 1912 2048 174 30 96.775871 customer4 1 6 3 3 0 780 2097 1307 48 -1 5 1 6 3 3 1 780 2106 151 39 96.667061 relating5 1 6 3 3 2 943 2108 35 29 95.996101 to5 1 6 3 3 3 991 2103 208 40 95.996101 complaints5 1 6 3 3 4 1211 2102 177 39 96.406921 involving5 1 6 3 3 5 1399 2100 206 40 96.406921 allegations5 1 6 3 3 6 1618 2099 40 32 96.584518 of5 1 6 3 3 7 1664 2098 173 33 96.584518 excessive5 1 6 3 3 8 1849 2097 46 32 93.293846 oils 1 6 3 3 9 1908 2105 179 29 92.644852 consump-4 1 6 3 4 0 779 2146 1307 54 -1 5 1 6 3 4 1 779 2157 75 31 97.002380 tions 1 6 3 4 2 868 2166 40 22 96.578598 or5 1 6 3 4 3 922 2154 126 46 96.528168 engines 1 6 3 4 4 1063 2153 146 39 96.560219 damages 1 6 3 4 5 1224 2152 66 33 96.399567 dues 1 6 3 4 6 1305 2154 35 30 95.590416 to5 1 6 3 4 7 1356 2151 78 32 95.590416 lacks 1 6 3 4 8 1448 2150 39 32 96.930168 of5 1 6 3 4 9 1497 2149 45 33 96.621727 oils 1 6 3 4 10 1558 2149 37 32 95.568161 in5 1 6 3 4 11 1609 2159 22 22 95.568161 a5 1 6 3 4 12 1647 2148 194 32 95.786491 1974-19795 1 6 3 4 13 1856 2146 230 39 96.389244 Volkswagen4 1 6 3 5 0 780 2195 1307 44 -1 5 1 6 3 5 1 780 2217 38 22 96.760918 or5 1 6 3 5 2 837 2205 92 33 95.929840 Audi5 1 6 3 5 3 947 2204 134 33 96.080421 vehicles 1 6 3 5 4 1100 2203 85 33 96.131180 with5 1 6 3 5 5 1204 2213 22 22 96.131180 a5 1 6 3 5 6 1243 2200 238 34 96.511688 water-cooled5 1 6 3 5 7 1499 2199 154 40 96.167587 gasolines 1 6 3 5 8 1672 2196 126 41 96.688950 engines 1 6 3 5 9 1817 2195 207 35 96.381424 distributed5 1 6 3 5 10 2042 2195 45 40 96.817711 by4 1 6 3 6 0 780 2241 1313 54 -1 5 1 6 3 6 1 780 2255 230 40 96.367393 Volkswagen5 1 6 3 6 2 1035 2253 40 33 96.443428 of5 1 6 3 6 3 1092 2253 172 37 96.153008 America,5 1 6 3 6 4 1288 2250 198 34 96.616058 warranted5 1 6 3 6 5 1510 2250 37 31 96.497734 in5 1 6 3 6 6 1570 2248 139 39 96.663284 writings 1 6 3 6 7 1731 2247 45 40 96.550743 by5 1 6 3 6 8 1799 2241 231 44 96.796822 Volkswagen5 1 6 3 6 9 2053 2244 40 33 96.351570 of4 1 6 3 7 0 780 2295 1307 49 -1 5 1 6 3 7 1 780 2306 172 38 96.601555 America,5 1 6 3 7 2 966 2315 39 22 96.976753 or5 1 6 3 7 3 1018 2303 157 33 96.563469 certified5 1 6 3 7 4 1187 2302 46 41 96.899529 by5 1 6 3 7 5 1245 2302 60 33 96.726875 thes 1 6 3 7 6 1318 2301 265 33 96.848679 manufacturers 1 6 3 7 7 1596 2310 38 22 96.764824 as5 1 6 3 7 8 1647 2298 154 40 96.954552 meetings 1 6 3 7 9 1813 2295 193 42 93.291908 applicable5 1 6 3 7 10 2019 2295 68 33 93.207901 fed-4 1 6 3 8 0 781 2345 1306 51 -1 5 1 6 3 8 1 781 2356 73 33 96.988708 eral5 1 6 3 8 2 867 2356 113 40 96.890816 safety5 1 6 3 8 3 992 2355 69 33 96.551453 ands 1 6 3 8 4 1074 2354 182 33 96.551453 emissions5 1 6 3 8 5 1268 2351 195 34 96.760468 standards.5 1 6 3 8 6 1476 2350 110 33 96.846573 These5 1 6 3 8 7 1599 2349 155 40 96.670296 disputes5 1 6 3 8 8 1766 2348 43 32 96.670296 do5 1 6 3 8 9 1821 2350 61 30 96.849396 not5 1 6 3 8 10 1894 2346 148 33 96.090012 include:5 1 6 3 8 11 2057 2345 30 36 96.090012 1)4 1 6 3 9 0 781 2397 1306 45 -1 5 1 6 3 9 1 781 2406 310 34 96.393799 reimbursements5 1 6 3 9 2 1111 2405 53 32 96.599922 for5 1 6 3 9 3 1183 2403 85 33 96.516365 such5 1 6 3 9 4 1288 2403 118 39 96.344521 things5 1 6 3 9 5 1425 2412 38 22 96.963371 as5 1 6 3 9 6 1483 2401 68 32 96.444237 loss5 1 6 3 9 7 1570 2400 40 32 96.719452 of5 1 6 3 9 8 1622 2409 123 30 96.558022 wages,5 1 6 3 9 9 1765 2398 158 33 96.369995 business5 1 6 3 9 10 1943 2397 144 37 96.639618 income,4 1 6 3 10 0 781 2447 1306 50 -1 5 1 6 3 10 1 781 2457 236 40 96.309433 depreciation5 1 6 3 10 2 1030 2466 38 22 96.309433 or5 1 6 3 10 3 1080 2455 68 33 96.546928 loss5 1 6 3 10 4 1161 2455 39 32 96.559563 of5 1 6 3 10 5 1206 2454 113 37 96.559563 value,5 1 6 3 10 6 1332 2454 209 39 96.667145 permanent5 1 6 3 10 7 1553 2450 237 40 96.550560 replacements 1 6 3 10 8 1801 2447 286 40 96.992516 transportation,4 1 6 3 11 0 781 2498 1308 50 -1 5 1 6 3 11 1 781 2519 39 21 96.590500 or5 1 6 3 11 2 843 2518 69 30 96.590500 any5 1 6 3 11 3 934 2506 102 33 96.546005 others 1 6 3 11 4 1057 2503 262 41 95.973633 consequential5 1 6 3 11 5 1342 2503 172 39 96.766312 damages,5 1 6 3 11 6 1539 2500 117 33 96.991684 unless5 1 6 3 11 7 1679 2499 48 33 96.871712 all5 1 6 3 11 8 1750 2499 61 31 96.878319 thes 1 6 3 11 9 1833 2498 131 40 96.408073 parties5 1 6 3 11 10 1987 2506 102 30 96.463539 agree Decision and Order 110 F.T.C.

specifically in writing that the arbitrator may consider such an item; 2) claims which exceed the cash purchase price of the product involved in the dispute, (plus expenses for towing, storage fees, rental car costs, telephone and hotel bills) unless all parties agree specifically in writing that the Arbitrator may consider other costs of purchase; 3) claims covered by insurance, punitive damages, or claims for mental anguish or personal injury. The vehicle need not be currently owned or leased by the consumer. Expenses for towing, storage fees, rental car costs, telephone and hotel bills may be included in the claim to be arbitrated. The Arbitrator has no authority to decide that a party or parties violated any law or to consider matters which cannot be arbitrated under the law. In making any award for reimbursement, repair or repurchase, the Arbitrator may consider requests for deductions based on such factors as owner usage, mileage, overall condition of the product and optional equipment. The decision as to whether your dispute or any part of your dispute is arbitrable under - these rules, or is within the scope of your “Response to Volkswagen Mediation and Arbitration Program” form, rests with either BBB and CBBB, subject to the terms of the agreement between Volkswagen and the FTC under which this program is being conducted. 2. APPLICATION OF THESE RULES These special rules apply to any dispute described under the definition of “Disputes” which you agree to arbitrate through the BBB. You must accept these rules when you sign the “Response to Volkswagen Mediation and Arbitration Program” form. [3] 3. THE LEGAL BASIS FOR BBB AUTO LINE BBB AUTO LINE is an informal forum based on the United States Arbitration Act, 9 U.S.C. 1-14, and administered under procedures consistent with state law. The BBB at all times reserves the right to discontinue administration of arbitration for any case(s) due to a conflict with any state or federal law or regulation. To the extent that any party wants to challenge or enforce an arbitrator’s decision, a court of competent jurisdiction shall be the proper forum. The BBB accepts no responsibility for costs incurred by either party in challenging or enforcing any decision. 4, BEGINNING ARBITRATION You may complete the “Response to Volkswagen Mediation and Arbitration Program” form and indicate you wish to begin arbitration proceedings immediately; or You may complete the “Response to Volkswagen Mediation and Arbitration Program” form and indicate you wish to try mediation. VOLKSWAGEN OF AMERICA, INC., ET AL. 443 392 Decision and Order If no settlement is reached, you will be notified of the date of the arbitration hearing at least 8 days in advance of the hearing. The answers to the questionnaire included with the ‘Response to Volkswagen Mediation and Arbitration Program” will determine the issues to be arbitrated.

5. SELECTING YOUR ARBITRATOR The BBB will maintain a pool of individuals who have volunteered to serve, at no pay, as Arbitrators in this program. These volunteers have been trained to conduct a hearing and make a decision in accordance with these rules; but they do not necessarily have mechanical or legal expertise. Arbitrators will be selected from this pool in the following way:

The BBB will provide the customer with a list of Arbitrators chosen from the volunteer pool, together with brief biographies of each. After receiving this list, the customer will have five days to cross off any name with whom a financial, competitive, professional or social relationship exists and assign priorities to those remaining (#1, #2, #3, etc.). If you do not return the list within five days the BBB will assume all names are satisfactory to you and assign one of the Arbitrators on your list to hear your case. [4] This selection process may take place in a phone call from the BBB to the consumer, unless the consumer requests that the procedure prescribed in the preceding paragraph be used instead. If by telephone, the BBB will read the names and biographies of a list of volunteer Arbitrators, check for potential conflicts of interest and the customer will then assign priorities to the list of volunteer Arbitrators.

Whether the selection process is conducted by telephone or in writing, every effort will be made to provide the customer with the highest choice available. Once an Arbitrator selected has been confirmed with the parties, any substitute must either be approved by the customer or the selection process must be conducted again. The BBB may use variations of this selection process; however, any alternative procedure shall be designed to avoid any conflict of interest, provide the customer a selection and be approved by the CBBB. VWoOA will take no part in the selection of the Arbitrator. 6. COMMUNICATING WITH THE ARBITRATOR You or anyone representing you shall not communicate in any way with the Arbitrator about your dispute except at the inspection or hearing where the other party has received notice, or unless all other parties are present or have given us their written permission. All Decision and Order 110 F.T.C.

other communications about your case with the Arbitrator must be sent through the BBB, which must share them with the other parties. Any communications with the Arbitrator not directed through the BBB will be a violation of this rule and your case may be discontinued. 7. QUALIFYING THE ARBITRATOR The Arbitrator shall sign a special oath, pledging to make an unbiased decision in your dispute.

If a financial, competitive, professional, family or social relationship exists and no impartial decision is possible, the Arbitrator shall refuse to serve. Even if the Arbitrator believes the relationship is so minor as to have no effect on the decision, it shall be revealed to everyone, and you may decide against this Arbitrator serving in your case. The BBB reserves the right to reject any Arbitrator for any conflict which it believes will affect the program’s credibility. [5] 8. YOUR REPRESENTATIVE In any arbitration procedure, you may present your own case or have someone represent you. If your representative is a lawyer, you must give the lawyer’s name and address to the BBB at least eight (8) days before the hearing. The BBB will notify the other parties so they have an opportunity to obtain a lawyer if they want. Your failure to give the BBB advance notice may result in a rescheduling of your hearing. You are responsible for any fees charged by your representatives.

9. INSPECTION BY THE ARBITRATOR You or the Arbitrator may request an inspection of the product or service involved in your dispute. The BBB will always schedule an inspection when a consumer seeks a repurchase or replacement of their vehicle, unless all parties agree in writing that such an inspection is not necessary. If possible, the inspection will be performed as part of the hearing, otherwise, the inspection will be scheduled for a later date and all parties will receive at least eight (8) days notice unless waived by all parties.

If the BBB has scheduled an inspection and the vehicle is not available, no decision shall be made in your case. 10. TECHNICAL ADVISERS At the request of the Arbitrator, the BBB will make every effort to obtain a neutral technical adviser to inspect your car. At the BBB’s option, the adviser’s findings will be presented in writing or in person either before, during or after the hearing. In any case, you will have an opportunity to evaluate and comment on the qualifications and VOLKSWAGEN OF AMERICA, INC., ET AL. 445 392 Decision and Order _ findings of the adviser. You also have the right to get your own technical adviser to serve as your witness at your expense. 11. HEARING NOTICE The BBB will set a time (during normal business hours) and place for your arbitration hearing, with due regard for your convenience and that of the arbitrator, and will notify you in writing at least eight (8) days in advance of the hearing. Contact the BBB at once if you cannot attend. If you object to the time or place stated in your notice, contact the BBB immediately and let them know. If you do not object or if you attend the hearing, your acceptance of the notice will be assumed. If our offices are very far from your home, we will arrange for a hearing facility as close to your home as is reasonably possible. [6] a 12. WRITTEN OR TELEPHONE HEARINGS Although most arbitrations involve in-person hearings, the BBB, at your request, may arrange to have your statement and evidence presented by telephone or in writing. If you appear in person, Volkswagen may present its case in person, by telephone, or in writing. If you present your case by telephone, Volkswagen may present its case by telephone or in writing. If you present your case in writing, Volkswagen must also present its case in writing. You always have the right to be present at your arbitration hearing. You also have the right to review and respond to any information submitted by Volkswagen. 13. ATTENDANCE AT HEARINGS The BBB has the option to arrange for volunteers from our pool of Arbitrators or for governmental representatives to attend arbitration hearings.

For any other observer to attend a hearing, the BBB will first determine that reasonable accommodations exist and then make sure that neither the customer nor the arbitrator does not object to the presence of an observer. If there is room and no obj ection, the observer shall be subject to the BBB’s directions regarding proper conduct. 14. MEDIA PRESENCE IN THE HEARING Media shall be permitted access to arbitration hearing on the same basis as other observers. Unless there is approval of all parties and the Arbitrator, neither media representatives nor any other observer may be permitted to bring cameras, lights, recording, or any other equipment into the hearing. Under these circumstances, all observers, including media representatives, shall be limited to note taking, and Decision and Order 110 F.T.C.

shall be subject to the BBB’s directions regarding observers’ proper conduct that will not affect your right to present your case. 15. YOUR ABSENCE FROM THE HEARING Ifyou do not attend a hearing after receiving proper notice from the BBB, the Arbitrator may decide to go ahead with the hearing in your absence. Your absence does not mean an automatic decision against you, and you shall be given an opportunity to present your case in a time and manner set by the Arbitrator. If you then fail to present your case, the Arbitrator may make a decision without your presentation. (7] 16. RECORD OF HEARING The BBB will maintain basic file information on your arbitration hearing, such as the witnesses’ names and documents presented as evidence at the hearing. Copies of this and other official arbitration forms relating to your case will be given to you on request. A reasonable copying fee may be charged.

If you give the BBB at least 5 days advance notice, the BBB will arrange for a court reporter at your expense or will audio tape your hearing and, for reasonable copying and transmittal costs, give you a copy. Copies shall also be given to other parties and to the Arbitrator at your expense. The Arbitrator may request the BBB tape a hearing at any time.

All taping or other records of an arbitration hearing are the BBB’s sole responsibility and no other person shall make such a record at any time.

17. INTERPRETERS If you need an interpreter for your arbitration and can not provide your own, contact the BBB and it will make every effort to find a volunteer interpreter.

18. OATH OF PARTICIPANTS You and your witnesses shall be placed under oath at the hearing. 19. HEARING PROCEDURES The Arbitrator will decide on the order and procedures for you to present your side of the dispute. You will be given an opportunity to make a personal presentation of your case, as well as present any witnesses and evidence in support of your case. You may also question the other parties, their witnesses and their evidence. After everyone has given their presentation, you will be given an opportunity to make a closing statement. When the Arbitrator is satisfied that all VOLKSWAGEN OF AMERICA, INC., ET AL. 447 392 Decision and Order testimony and evidence have been presented, your hearing will be closed. If you prepare any part of your case in writing for the arbitration, the other party will have an opportunity to see your statement and submit a response to the BBB which will forward both statements to the Arbitrator.

20. ADMISSION OF EVIDENCE AT THE HEARING Legal rules of evidence do not apply to an arbitration. However, you should be sure your evidence is true and relevant to your case. [8] The Arbitrator can limit your presentation if it is repetitious or irrelevant.

21. ABSENTEE STATEMENTS If you have a witness who cannot attend the hearing, you may present that person’s written statement to the Arbitrator. You must make a copy for the other party to read and use for response. Before the Arbitrator makes a decision, you may ask the Arbitrator to give you a reasonable number of days to respond to a written statement presented by the other party, and the Arbitrator may grant that request at his discretion.

22. SUBPOENA POWERS If you have a reason to believe the other side will not present certain witnesses. or evidence which you consider important to a full and fair consideration or dispute, you may send the BBB a request | that the Arbitrator subpoena these witnesses or evidence. If the Arbitrator agrees with your request, a subpoena will be sent according to state law.

23. POST-HEARING ADMISSION OF EVIDENCE Prior to a decision, an Arbitrator may schedule new or additional hearings or otherwise request or allow new or additional evidence in order to get all possible facts relating to your dispute. Before a decision is made, you may send the BBB new information that was impossible to present at your original hearing and request that it be considered. The BBB will share it with the other parties for their response and forward it to the Arbitrator. After the Arbitrator has made a decision in your case, no more arguments or evidence may be presented, even if newly discovered or not available at the time of the hearing.

24. SETTLEMENT If you and the other parties voluntarily decide to settle your dispute before the hearing, the settlement will end your dispute and no hear- Decision and Order 110 F.T.C.

ing will be held. You should be sure you are satisfied with the settlement. If Volkswagen agrees to pay you money as part of a voluntary settlement, it must send you a check within 45 days; any repair agreed to under a voluntary settlement must be completed within 30 days. Be sure to let the BBB know about it so the BBB can verify it was done within the time promised. If your voluntary settlement occurs during the hearing, the Arbitrator shall include the settlement in the final decision. If your settlement occurs after the hearing but before [9] the Arbitrator’s final decision, be sure to notify the BBB at once. 25. TIME LIMITS If you contact the BBB or Volkswagen about an oil consumption or engine damage from lack of oil complaint on an eligible 1974-1979 VW or Audi, you will be sent an information packet within fifteen days or before 60 days after the program goes into effect, whichever is later.

After you return the form indicating you wish to participate in the program, an arbitration hearing must be completed within 60 days after Volkswagen receives your form, regardless of whether you try mediation first. This time deadline may only be extended for delays caused by you.

26. THE DECISION A. Time The Arbitrator will forward to the BBB.a final decision, or interim decision where appropriate, within ten (10) days of closing your hearing. In cases where an interim decision has been rendered, and the consumer notifies BBB that the repair ordered was not performed or was performed unsatisfactorily, the Arbitrator will have 30 days from the date the consumer notifies the BBB of that fact to forward a final decision. Upon the Arbitrator’s request, the BBB may extend this time for special circumstances.

If you have been asked or allowed by the Arbitrator to furnish additional evidence in support of your case, the Arbitrator will set a time for you to send it to the BBB which shall seek a response to your evidence from the other party and send everything to the Arbitrator. Receipt of these additional materials by the Arbitrator shall signal the start of the ten-day decision period. The BBB will mail you a copy of the Arbitrator’s decision but will not read a decision to you over the telephone.

B. Scope A decision shall be one that:

VOLKSWAGEN OF AMERICA, INC., ET AL. 449 392 Decision and Order 1) the Arbitrator considers fair; and 2) falls within the scope of your “Response to Volkswagen Mediation and Arbitration Program” form. [10] The decision may order an action to be performed, money to be paid, or any combination of these remedies. It may give you all or part of what you seek. Or it may be a decision in which the Arbitrator feels fairness requires no payment or performance at all. C. Clarifying or Correcting the Decision If you do not understand what the arbitrator has written, you should immediately inform the BBB in writing to request clarification. If you believe the decision contains a mistake of fact, a miscalculation of figures, or exceeds the arbitrator’s authority, inform the BBB - in writing of your position immediately. A “mistake of fact” is not a conclusion of the Arbitrator with which you disagree; it is a true error in such things as a date, time, place, or name, and may only justify a clarification or correction if it con- . cerns the essence of the decision.

A “miscalculation of figures” is not a dollar figure you consider to be unfair; it is an arithmetic error. The “Arbitrator’s authority” is limited to the scope of the “Response to Volkswagen Mediation and Arbitration” Form.

The BBB will not accept a clarification or correction request attempting to reargue your case, or based upon your disagreement or disappointment with the decision. If your written statement to the BBB is a valid request for clarification or correction of the decision, the BBB will share your position with the other party, solicit their views and send it to the Arbitrator, who may accept it in whole, in part, or reject it altogether. The Arbitrator may only clarify the intent or correct mistakes in the original decision, not change the substance of that decision.

D. Decision is Impossible to Perform If you believe you cannot perform the Arbitrator’s decision within the established time limit or at all, this should be put in writing at once and sent to the BBB. We shall handle your submission in the same manner as a request for correction or clarification. The Arbitrator may request additional evidence, may request another hearing, or may do anything necessary to confirm or deny your allegation of impossibility of performance. If the CBBB confirms such impossibility, the original decision may then be changed. [11] If the manufacturer has exceeded the time for performance specified in the Decision, notify the BBB in writing. The BBB will immediately contact the manufacturer and Arbitrator. If the Arbitrator Decision and Order 110 F.T.C.

determines that the manufacturer is performing in good faith and that the delay is reasonable, the manufacturer’s time performance may be extended. If the consumer contests this determination, they are free to go to court to challenge or confirm the award. E. Suspending the Time to Perform If you submit to the BBB a written statement to the BBB relating to correction, clarification, or impossibility to perform the decision, the time for acceptance and performance of a decision shall be suspended until the issue is resolved by the Arbitrator or by the BBB. F. Reasons for Decision An Arbitrator shall include reasons for a decision, either in the decision or in an accompanying form, and the BBB will forward the reasons to all parties along with the decision. Your written request for clarification or correction of a decision may not be based upon the reasons for the decision, but must be based on the decision alone.

G. Acceptance or Rejection of the Decision The BBB will send the Arbitrator’s decision to you, the consumer, for acceptance or rejection. If you accept the decision: Volkswagen will be legally bound to abide by the decision; if Volkswagen is ordered to pay you money, it must send you a check within 45 days; any repair that is ordered must be completed within 30 days except that the Arbitrator may modify the deadline for repair for good cause shown at the hearing; and You, too, will be legally bound, which means you give up any right to sue Volkswagen in court on any claim that falls within the scope of your arbitration, unless Volkswagen fails to perform according to the Arbitrator’s decision. (If this should happen, first notify the BBB; however, you may legally enforce the decision or pursue other legal remedies under state or federal law should such a failure occur.) [12] If you reject the decision: you may pursue other legal remedies under state or federal law; Volkswagen will not be obligated to perform any part of the decision; and depending on federal or state law the decision may be introduced as evidence by you or Volkswagen in any civil court action relating to any matter considered in your arbitration hearing.

NOTE: Your failure to accept or reject the decision within 14 days will be considered a rejection.

VOLKSWAGEN OF AMERICA, INC., ET AL. 451 392 Decision and Order H. Confidentiality of Proceedings It is BBB policy that the mediation and arbitration process is private and confidential. The BBB will not release the results of your individual case to the media or any other group or organization. The BBB may release records when all parties agree or when such release is required by law or pertinent to judicial or governmental administrative proceedings. The Federal Trade Commission may also receive records of arbitration proceedings.

L Verification of Performance If a decision is accepted, Volkswagen must do what the decision requires within the time limits stated. Unless otherwise stated in the decision, the time for performance begins when the BBB received written notice of the acceptance. When this time limit is up, the BBB must contact the consumer within two weeks of when VW was supposed to perform to be sure Volkswagen has performed. [13] 27. FAILURE TO COMPLY WITH RULES Any failure to follow these rules that may significantly affect the independence, impartiality, fairness or expeditiousness of the mediation or arbitration process should be raised with the Better Business Bureau at the earliest opportunity. Any party raising such objections should attempt to document the specific harm caused by the failure to follow these rules. The BBB may request that you put your objections in writing. If the BBB rules against your objections, it may continue processing your case. If you are not satisfied with the BBB’s ruling, you may contact the Federal Trade Commission, Division of Enforcement, Washington, D.C. 20580.

28. INTERPRETATION OF RULES The BBB will not advise the Arbitrator or make a statement on matters relating to the merits of your case or the reasonableness of the decision. The CBBB will make the decision on procedural questions, the scope of the agreements, and other questions concerning the application and interpretation of these rules, subject to the terms of the agreement between Volkswagen and the Federal Trade Commission under which this program is being conducted. ATTACHMENT El [SETTLEMENT OFFER] Dear [VW] [Audi] owner:

You have expressed concern about unsatisfactory oil consumption or engine damage from lack of oil on your gasoline-fueled [brand, model, model year, with VIN, if known]. Decision and Order 110 F.T.C.

We are writing to tell you about a FREE claim settlement program which we are offering to you and other owners who may have experienced these conditions. The program may result.in a REFUND, FREE REPAIR, or both. We are offering you this program under a settlement of a lawsuit with the Federal Trade Commission (FTC). You do not still have to own or lease the car to be eligible. But, you must fill out the enclosed form to take advantage of this free program. Under this program, we can resolve your problem in one of three ways: 1. If you agree, we will settle with you immediately, on the basis of an offer which is attached to this letter and is entitled “Statement of Settlement Offer”. 2. If our settlement offer is not acceptable to you, you can use the mediation services of your local BBB office, before proceeding to arbitration. 38. Or, you may want to use the arbitration services of your local BBB, without trying mediation.

If you want to resolve your complaint now, check the first box on the enclosed form. We will settle your claim for the amount stated on the enclosed form. If you accept, you will receive a check within 45 days.

If you want to use the BBB’s mediation services before going to arbitration, check the second box on the enclosed form and fill out the brief questionnaire on the back of the form. If mediation efforts are not successful, the BBB will arrange a date for arbitration within 60 days from when we receive this form. If the case is settled, or the arbitrator makes an award in your favor, you will then receive a check within 45 days, or your car will be repaired in most cases, within 30 days. If you want to use the BBB’s arbitration services without trying mediation, check the third box on the enclosed form and [2] fill out the brief questionnaire on the back of the form. The BBB will set an arbitration hearing to be held within 60 days. If the arbitrator makes a decision in your favor, you will receive a check within 45 days, or your car will be repaired in most cases, within 30 days. If you want to use mediation or arbitration, please include copies of as much documentation as you can with your claim form. This will expedite processing and may help us negotiate a settlement with you directly.

Under the mediation program, a BBB employee will try to help Volkswagen and you to agree on a settlement. With arbitration, a volunteer from the community will conduct an informal hearing where you and VW will present the facts. The volunteer arbitrator will then decide what relief to award you, if any. The arbitrator’s decision is legally binding only if you decide to accept it. [A “legally binding” decision means that we must do what the arbitrator says and that you will be unable to pursue your claim in further legal proceedings]. If you reject the decision then you have the option of pursuing further legal proceedings that might be available to you under applicable laws. However, once you have rejected an arbitrator’s decision, you will not be able to arbitrate your claim again or to reinstate the arbitrator’s award. We have enclosed a brochure which describes the BBB program and other special provisions in detail.

We also have enclosed “Background Statements,” prepared jointly by the FTC and Volkswagen, to give you some useful facts about oil usage and engine damage from lack of oil. You should read these documents carefully before deciding whether to accept our settlement offer described in this letter or preparing your claim for the mediation and arbitration programs. If you take your case to the BBB, you may give the Background Statements to the mediator or arbitrator, or otherwise use them in preparing your arguments.

You are free to accept our offer, to reject it and take your complaint immediately to VOLKSWAGEN OF AMERICA, INC., ET AL. 453 392 Decision and Order the Better Business Bureau program for mediation and then arbitration. Or, you can reject our offer and begin the arbitration process immediately, omitting further mediation efforts. Just fill out the enclosed form “Response to Volkswagen Mediation and Arbitration Program” and send it to us in the enclosed postage pre-paid envelope. [3] We look forward to hearing from you soon.

Sincerely, Volkswagen of America [4] [SETTLEMENT OFFER MADE] RESPONSE TO VOLKSWAGEN MEDIATION AND ARBITRATION PROGRAM {__] 1. I accept Volkswagen of America’s settlement offer in the amount of $__.00. Volkswagen of America will send me a check for this amount within 45 days of receipt of this response. I understand that by accepting this settlement I release Volkswagen [insert language specifying release that comports with Paragraph E of Section IV]. {__] 2. I want to use the BBB mediation and arbitration procedures. I understand that . if mediation efforts are not successful, my local BBB will set an arbitration hearing date for less than 60 days after you receive this form. I have also read the enclosed brochure describing the BBB mediation and arbitration program, and the enclosed Background Statement(s).

[__} 3. I want to proceed to an arbitration hearing without using BBB’s mediation services first. I understand that my local BBB will set an arbitration date for less than 60 days after you receive this form. I have also read the enclosed brochure describing the BBB mediation and arbitration program, and the enclosed Background Statement(s).

If you checked 2. or 3., please fill out the brief questionnaire on the back of this form. Be sure to fill out the form carefully. The arbitrator will not be able to decide any issues not set out in the form, and will be able to give you only what you asked for on the form.

Signature Please print your name, address and telephone number where you can be reached during the day:

NAME:

ADDRESS:

CITY: STATE ZIP:

DAYTIME PHONE () EVENING PHONE( ) WW [5J Decision and Order 110 F.T.C.

Be sure to fill out the form carefully, because it will determine what issues the arbitrator can decide. PLEASE DESCRIBE BRIEFLY THE PROBLEM YOU HAD WITH YOUR CAR: WHAT IS THE RESOLUTION YOU SEEK? (The issues which can be arbitrated and the remedies available are explained in the paragraphs entitled “Beginning the AUTO LINE Program” and “The Arbitration Process” which you will find on pages XX and YY of the enclosed “BROCHURE FOR CLAIMANTS DESCRIBING THE AUTO LINE PROGRAM FOR OIL RELATED CLAIMS ON 1974 - 1979 VOLKSWAGEN AND AUDI VEHICLES.” The remedies available are governed by Rule 26. B. and Rule 1. H. of the “SPECIAL MODIFIED RULES FOR THE ARBITRATION OF VOLKSWAGEN AND AUDI OIL RELATED CLAIMS.” You may request a copy of these rules by calling the company at (800) EE RE ER ) WHAT HAS THIS PROBLEM COST YOU? (Please do not include any costs from loss of business, wages or personal injury.) Repairs $____ Telephone calls $ Rental Cars $____ Other direct costs $ Towing $. (Please specify.) $ Storage fees $ $ TOTAL $ (NOTE: The arbitrator will not be allowed to award you more than what you ask for on the claim form.) DOES THE CAR STILL NEED REPAIRS FOR EXCESSIVE OIL CONSUMPTION OR FOR ENGINE DAMAGE FROM LACK OF OIL? YES NO — IF YOU KNOW, WHAT REPAIRS DOES IT NEED? WHAT IS THE APPROXIMATE CURRENT MILEAGE, IF YOU STILL OWN THE CAR? VEHICLE IDENTIFICATION NO. (if known):

MODEL: MODEL YEAR PLEASE SEND IN COPIES OF ANY RECORDS, IF YOU HAVE THEM, OF THE AMOUNT OF YOUR CLAIM—BILLS, CHECKS, RECEIPTS, ETC. THIS WILL EXPEDITE PROCESSING AND POSSIBLE SETTLEMENT OF YOUR CLAIM. ATTACHMENT E2 [NO SETTLEMENT OFFER] Dear [VW] [Audi] owner:

You have expressed concern about unsatisfactory oil consumption or engine damage from lack of oil on your gasoline-fueled [brand, model, model year, with VIN, if known]. VOLKSWAGEN OF AMERICA, INC., ET AL. 455 392 Decision and Order We are writing to tell you about a FREE claim settlement program which we are offering to you and other owners who may have experienced these conditions. The program may result ina REFUND, FREE REPAIR, or both. We are offering you this program under a settlement of a lawsuit with the Federal Trade Commission (FTC). You do not still have to own or lease the car to be eligible. But, you must fill out the enclosed form to take advantage of this free program. Under this program, we can resolve your problem in one of two ways: 1. You can use the mediation services of your local Better Business Bureau (BBB) office, followed by arbitration, if necessary. 2. Or, you may want to use the arbitration services of your local BBB, without trying mediation.

If you want to use the BBB’s mediation service before going to arbitration, check the first box on the front of the enclosed form, fill out the brief questionnaire on the back and mail it in. If mediation does not resolve the matter, the BBB will arrange a date for arbitration within 60 days from when we receive this form. If the case is settled, or the arbitrator makes an award in your favor which you accept, you will then receive a check within 45 days, or your car will be repaired in most cases within 30 days. If you want to use the BBB’s arbitration services without trying mediation first, check the second box on the enclosed form, and fill out the brief questionnaire on the back and mail it in. The BBB will set an arbitration hearing to be held within 60 days from when we receive this form. If the arbitrator makes a decision in your favor which you accept, you will receive a check within 45 days, or your car will be repaired in most cases within 30 days after your acceptance is received. If you want to use mediation or arbitration, please include copies of as much documentation as you can with your claim form. [2] This will expedite processing and may help us to negotiate a settlement with you directly. Under the mediation program, a BBB employee will try to help Volkswagen and you to agree on a settlement. With arbitration, a volunteer from the community will conduct an informal hearing where you and VW will present the facts. The volunteer arbitrator will then decide what relief to award you, if any. The arbitrator’s decision is legally binding only if you decide to accept it. [A “legally binding” decision means that we must do what the arbitrator says and that you will be unable to pursue your claim in further legal proceedings.] If you reject the decision then you have the option of pursuing further legal proceedings that might be available to you under applicable laws. However, once you have rejected an arbitrator’s decision, you will not be able to arbitrate your claim again or to reinstate the arbitrator’s award. We have enclosed a brochure which describes the BBB program and other special provisions in detail. ;

We also have enclosed “Background Statements,” prepared jointly by the FTC and Volkswagen, to give you some useful facts about oil usage and engine damage from lack of oil. You should read these documents carefully before preparing your claim for the mediation and arbitration programs. If you take your case to the BBB, you may give the Background Statements to the mediator or arbitrator, or otherwise use them in preparing your arguments.

You are free to take your complaint immediately to the Better Business Bureau program for mediation and then arbitration. Or, you can begin the arbitration process immediately, omitting further mediation efforts. Just fill out the enclosed form “Response to Volkswagen Mediation and Arbitration Program” and send it to us in the enclosed postage pre-paid envelope.

We look forward to hearing from you soon.

Sincerely, Volkswagen of America [3] Decision and Order ~ 110 F.T.C.

[NO SETTLEMENT OFFER MADE] RESPONSE TO VOLKSWAGEN MEDIATION AND ARBITRATION PROGRAM {__] 1. I want to use the BBB mediation and arbitration procedures. I understand that if mediation efforts are not successful, my local BBB will set an arbitration hearing date for less than 60 days after you receive this form. I have also read the enclosed brochure describing the BBB mediation and arbitration program, and the enclosed Background Statement(s).

[_] 2. I want to proceed to an arbitration hearing without using BBB’s mediation services first. I understand that my local BBB will set an arbitration date for less than 60 days after you receive this form. I have also read the enclosed brochure describing the BBB mediation and arbitration program, and the enclosed Background Statement(s).

If you checked 1. or 2., please fill out the brief questionnaire on the back of this form. Be sure to fill out the form carefully. The arbitrator will not be able to decide any issues not set out in the form, and will be able to give you only what you asked for on the form.

Signature Please print your name, address and telephone number where you can be reached during the day:

NAME:

ADDRESS:

CITY: STATE ZIP:

DAYTIME PHONE (_) EVENING PHONE (_) [4] Be sure to fill out the form carefully, because it will determine what issues the arbitrator can decide. PLEASE DESCRIBE BRIEFLY THE PROBLEM YOU HAD WITH YOUR CAR: WHAT IS THE RESOLUTION YOU SEEK? (The issues which can be arbitrated and the remedies available are explained in the paragraphs entitled “Beginning the AUTO LINE Program” and “The Arbitration Process” which you will find on pages XX and YY of the enclosed “BROCHURE FOR CLAIMANTS DESCRIBING THE AUTO LINE PROGRAM FOR OIL RELATED VOLKSWAGEN OF AMERICA, INC., ET AL. 457 392 Decision and Order CLAIMS ON 1974 - 1979 VOLKSWAGEN AND AUDI VEHICLES.” The remedies available are governed by Rule 26. B and Rule 1. H. of the “SPECIAL MODIFIED RULES FOR THE ARBITRATION OF VOLKSWAGEN AND AUDI OIL RELATED CLAIMS.” You may request a copy of these rules by calling the company at (800) FORK ERK ) WHAT HAS THIS PROBLEM COST YOU? (Please do not include any costs from loss of business, wages or personal injury.) Repairs $__ Telephone calls $ Rental Cars $e Other direct costs $_ Towing $ (Please specify.) $__ Storage fees $. $e TOTAL $.

(NOTE: The arbitrator will not be allowed to award you more than what you ask for on the claim form.) DOES THE CAR STILL NEED REPAIRS FOR EXCESSIVE OIL CONSUMPTION OR FOR ENGINE DAMAGE FROM LACK OF OIL? YES NO — IF YOU KNOW, WHAT REPAIRS DOES IT NEED? WHAT IS THE APPROXIMATE CURRENT MILEAGE, IF YOU STILL OWN THE CAR? VEHICLE IDENTIFICATION NO. (if known):

MODEL: MODEL YEAR PLEASE SEND IN COPIES OF ANY RECORDS, IF YOU HAVE THEM, OF THE AMOUNT OF YOUR CLAIM—BILLS, CHECKS, RECEIPTS, ETC. THIS WILL EXPEDITE PROCESSING AND POSSIBLE SETTLEMENT OF YOUR CLAIM. ATTACHMENT F BROCHURE FOR CLAIMANTS DESCRIBING THE AUTO LINE PROGRAM FOR OIL-RELATED CLAIMS ON 1974 - 1979 VOLKSWAGEN AND AUDI VEHICLES WHAT IS AUTO LINE? AUTO LINE is an out-of-court program run by Better Business Bureaus to settle disputes between consumers and certain automobile manufacturers who agree to arbitrate complaints about their products and repairs. It includes a mediation service to settle claims voluntarily.

AUTO LINE is being used to implement a settlement of a 1981 lawsuit between Volkswagen of America and The Federal Trade Commission (FTC). Because some special provisions apply, this brochure only describes the AUTO LINE program for problems involving excessive oil consumption and engine damage from lack of oil in 1974 to 1979 Volkswagen and Audi vehicles equipped with water-cooled, gasoline- © powered engines distributed by Volkswagen of America, warranted in writing by Volk- Decision and Order 110 F.T.C.

swagen of America, or certified by the manufacturer as meeting applicable federal safety and emissions standards. These vehicles were the subject of that lawsuit. The FTC/Volkswagen/Audi settlement provides that any consumer who has a claim involving one of the oil-related problems noted above may use AUTO LINE to resolve it. This mediation and arbitration process is free of charge to the consumer. If efforts at mediation fail, or if the consumer elects to bypass the mediation phase, the BBBappointed arbitrator will conduct a fact-finding hearing and make a decision in the matter. If the consumer accepts the decision, Volkswagen must do as the arbitrator directs.

This booklet describes the BBB Auto Line program and tells you how to participate in the arbitration process.

To participate in this AUTO LINE program, consumers are not required to presently own or lease their car. Volkswagen and the FTC have agreed that previous owners or consumers who leased these cars may seek to resolve oil problem claims through the AUTO LINE programs. In addition, Volkswagen has agreed with the FTC to use AUTO LINE to resolve any complaint that involves an engine component on one of its previous, current, or future model year vehicles. Also, VW has voluntary programs that [2] provide for arbitrating certain complaints for other parts of the car. However, if the dispute does not concern an oil-related problem with the 1974 to 1979 vehicles noted on page 1, you must write to Volkswagen or call your local Better Business Bureau to receive a different brochure about these programs. The AUTO LINE Program offers:

* A mediated resolution of the dispute by. BBB staff; * Arbitration of claims if mediation has been unsuccessful or if the consumer elects to bypass mediation;

* A broad-based pool of trained volunteers from the local community who, as neutral arbitrators, decide the case;

* Arbitrators who are chosen by the consumer; * Procedures that are informal and allow consumers to present their own cases. Under the AUTO LINE Program:

* Mediation is voluntary;

* The arbitration hearing must be completed within 60 days after the consumer enters the program;

* Consumers can present their case in person, by telephone, or in writing; * Hearings are private unless the consumer agrees to have public observers; * An on-site vehicle inspection by an independent technical adviser to the arbitrator is available, if necessary;

* Consumers can pursue other available remedies if they do not accept the arbitrator’s decision;

* Mediation and arbitration will be monitored by the Federal Trade Commission. How Long Does Auto Line Take? Volkswagen and the FTC have agreed that specific deadlines shall govern the mediation and arbitration process.

* Whether or not you elect to mediate your claim, mediation and the arbitration hearing, if necessary, shall be completed within 60 days from the day Volkswagen receives [3] your request for arbitration and your completed forms. You will be notified in writing at least 8 days in advance of the date scheduled for the arbitration hearing.

* If the arbitrator orders Volkswagen to give you a money settlement, it must be paid within 45 days of the date you accept the decision. * Ifthe arbitrator orders Volkswagen to repair your car, the repair must be performed within 30 days of the date you accept the arbitrator’s decision, unless the VOLKSWAGEN OF AMERICA, INC., ET AL. 459 392 Decision and Order arbitrator shortens or lengthens the deadline for good cause shown. If a repair is ordered, and you notify the BBB that the repair ordered was not performed or was performed unsatisfactorily, the arbitrator will have 30 days from the date you notify the BBB of that fact to forward a final decision. ; * These 45- and 30-day deadlines also apply to any settlement you may reach with Volkswagen during the mediation process.

If any of these deadlines are missed, Volkswagen may have violated the agreement between it and the FTC. If this happens, you may inform the FTC (Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 6th and Pennsylvania Ave., N.W., Washington, D.C. 20580). However, if a delay is caused by you (for example, if you request an extension of time in which to prepare for your hearing or if you ask that the hearing be rescheduled for a later, more convenient date), that time is not counted.

BEGINNING THE AUTO LINE PROGRAM When you receive the form entitled “Response to Volkswagen Mediation and Arbitration Program” from Volkswagen, decide whether you wish to enter the AUTO LINE program. If you have not received “Response to Volkswagen Mediation and Arbitration Program” from Volkswagen, contact the company. Volkswagen’s tollfree number is (800) 822-8987, or you can write to Volkswagen of America at 888 West Big Beaver Road, Troy, Michigan 48007. Tell Volkswagen your name, address, telephone number, the make and model year of your car, and whether your claim involves oi] consumption, engine damage due to lack of oil or both. When Volkswagen sends you the AUTO LINE program form, it may offer to settle your claim without requiring either mediation or arbitration. You must decide whether to take Volkswagen’s initial settlement offer, or to proceed with participation in the arbitration program. [4] If you decide to enter the Auto Line program, complete the form from Volkswagen with as much information as possible and promptly return it to Volkswagen. Try to include the make, model, year and, the Vehicle Identification Number (VIN) of the car, together with a statement describing your problem. These are the most critical pieces of information, but other parts of the form are also important, including what you want VW to do. This must be stated because the arbitrator’s decision-making authority is limited to what you write on the form. (For example, if you request a refund of $100, the arbitrator cannot award you more than the amount you have requested.) Remember, also, to enclose copies of any documents you have that may help prove your case. If you no longer have copies of repair bills or cancelled checks, you might contact the repair shop or your bank or credit card company for copies. THE MEDIATION STAGE If you choose to participate in mediation, the BBB will review your claim and then review the position of Volkswagen. The BBB will try to achieve an informal resolution by serving as an intermediary between you and Volkswagen. If you negotiate a settlement with Volkswagen yourself, let the BBB know, so such a settlement can be verified. Should the BBB mediation efforts fail, an arbitration hearing will be scheduled automatically within 30 days of Volkswagen’s receipt of your request for mediation and arbitration.

If at any time, you decide that you do not want the BBB to continue seeking a mediated settlement of your complaint, or if you prefer not to try mediation, notify the BBB in writing. In either case, the agreement between the FTC and Volkswagen requires that the arbitration hearing be scheduled and held within 60 days of Volkswagen’s receipt of your request for mediation or arbitration. Decision and Order 110 F.T.C.

THE ARBITRATION PROCESS It is important for you to know what issues Volkswagen will arbitrate and those which it need not arbitrate. Volkswagen must arbitrate your claims for the cost of completed repairs, of needed repairs and for expenses related to your complaint of oil consumption or engine damage from lack of oil. Such expenses also include the cost of towing, rental cars, telephone calls, storage fees for your car, and hotel bills, and any amount by which you claim that the resale price of your car was reduced because of oil consumption or engine damage which had not been [5] repaired when the car was sold. The maximum amount you may claim is what you paid for the car plus related expenses.

Issues that may not be arbitrated in the BBB program include punitive damages, loss of business income, insurance claims, personal injury and property damage claims, and allegations of fraud or other violations of criminal law. Such issues are best dealt with in a court of law, and you are free to pursue such claims outside the context of arbitration.

Who Are The Arbitrators? Thousands of volunteers from all walks of life serve the BBB as arbitrators—decision makers—in these cases. They include professionals, educators, retirees, lawyers, housewives, and others, who have gone through a special training program. Arbitrators are not employed by the BBB, nor are they paid for their services. They perform this duty as a public service. All arbitrators are required to disclose, as a condition of hearing a case, any financial, commercial, professional, social or familial relationship—no matter how remote—with any of the parties or their counsel. No more than one-third of the arbitrators on the selection list sent to you by the BBB may be persons at a supervisory level in a company that makes, services, or sells a product. In all cases, your dispute will be decided by someone who is completely independent and has no vested interest in the outcome.

Choosing An Arbitrator Although state law and BBB policies offer various means of choosing arbitrators, normally you will be given a list of trained community volunteers together with a brief biography of each. You will be asked to cross off any arbitrator with whom you may have a business, financial, or social relationship, to select the arbitrator who is your first choice, and to indicate your priority preference (‘‘1”, “2,” “3,” etc.) for the remaining names. Where state law requires it, a panel of three arbitrators may decide your case. VWoA will take no part in the selection of the arbitrator. After you have returned your arbitrator choices to the BBB, along with an indication of the times when you will not be available to attend a hearing, the BBB will tell you when and where the hearing is to be held. If you have chosen to present your case in writing or by telephone, you also must make that choice known to the BBB. [6] What Does Arbitration Cost? The agreement between Volkswagen and the FTC requires Volkswagen to pay the costs of AUTO LINE. You will have no costs unless you choose to bring your own paid witnesses or retain an attorney. Copies of records and documents that are a part of the hearing will be available to you at any time for a reasonable cost. Also, if you want a recording of the entire proceedings, you must pay recording expenses. VOLKSWAGEN OF AMERICA, INC., ET AL. 461 392 Decision and Order The Hearing The actual hearing is an informal session. It is designed to ensure that you and Volkswagen’s representative get a full opportunity to describe the dispute to the arbitrator.

Normally, arbitration hearings are held at the BBB during regular working hours; however, the BBB will schedule a time and place convenient to you and to the others involved.

The hearings usually feature in-person presentations, during which each side presents its case to an arbitrator and all have an opportunity to ask questions, including the arbitrator. Most consumers choose to have in-person hearings, and the BBB believes this is the best way of getting all the facts before the arbitrator. However, you also have the option of presenting your case by telephone or in writing. ; A Volkswagen representative usually will attend the hearing to present its case. However, Volkswagen, at its option, also may present its case by telephone or mail (if you appear in person), or by mail (if you present your case by telephone). You always may present your case in person, even if Volkswagen does not. You may be represented by an attorney or other spokesperson, bring witnesses and present documents, bills, and any other information to prove your case. If you are being represented by a lawyer, tell the BBB as soon as possible so that Volkswagen can be given an opportunity to get legal counsel. At no time may you or your representative, or Volkswagen or its representative contact the arbitrator without the other party being present. All communications relating to the arbitration must be directed through the BBB. It will forward all information and make sure the other side gets copies when necessary. [7] When Are Inspections And Technical Advisers Involved? Sometimes the arbitrator will want to see the car or the repair work to get a full understanding of the facts. The BBB will send you a notice of the inspection time and place. You should be present for such an inspection, and you have a right to bring your own expert if you wish. Should the arbitrator request a technical adviser, the BBB will identify experts in the community who have no relationship with any party and are not potential competitors of Volkswagen.

If you no longer own or lease the car for which the claim is made, you will not be penalized in any way because the car is unavailable for inspection. HOW TO PREPARE FOR ARBITRATION? Before coming to the hearing, you should prepare an outline of your argument to help you in your presentation. In that way, you won’t forget important points in your favor. To assist you in your preparation, a checklist is given at the end of this section. Also, before coming to the hearing, you should prepare a list of questions you want to ask Volkswagen. A careful reading of the Background Statements provided to you by VW and the FTC with the letter informing you of the program’s availability should assist you in your preparation. During the hearing, you can add to your list of questions. Include anything new that occurs to you when you hear what the other side has to say. After you state the facts as you see them, Volkswagen has a right to ask you questions. After Volkswagen has stated the facts as they see them, you have the same right to ask them questions. To clarify uncertain areas and to gain a fuller understanding of the dispute, the arbitrator also is trained to ask questions. After each side has presented its case and the questioning is completed, you should be prepared to give a summary of your position. Try to describe the weak points in Volkswagen’s case, deal with any questions that have not otherwise been answered, and tell the arbitrator exactly what kind of decision you want and why. Decision and Order 110 E.T.C.

Remember that the sole purpose of the hearing is to allow the arbitrator to gather and sort the facts and thus make a fair decision. You should be prepared to convince the arbitrator that your position is right and that your opponent’s is wrong. [8] A friendly, sincere approach works best. You are there because you and Volkswagen have a disagreement, but keep that disagreement factual and within the bounds of normal courtesy and conventional language. Bombarding an arbitrator with technical jargon will not be productive, nor will rudeness, arguing with the arbitrator, or belittling your opponent. Put yourself in the arbitrator’s position—a volunteer whose only purpose is to help you resolve your dispute. Use common sense about how to proceed. An Arbitration Checklist Given here is a checklist to help you prepare for your arbitration hearing. Use whatever items are appropriate to your case; some may not apply. 1. Collect and bring to the hearing all available written information relating to the car and your dispute, especially those noted below. Bring original documents, if possible, and copies for the arbitrator and for the Volkswagen representative. If you do not have documents, sometimes you can get copies from your repair shop, bank, or credit card company. Remember that, although documents are helpful, you are still eligible for a hearing even if you do not have them. Documents that might be useful include: * purchase contract/finance agreements; purchase date, price, etc.; : vehicle repair, service, or maintenance records; warranties or service contracts which may be applicable; proof of repair or maintenance payments;

correspondence between you and the dealer or manufacturer; copies of the Background Statements which Volkswagen sent you regarding “Oil Usage” or “Engine Damage From Lack of Oil.” You may find these fact sheets useful in preparing your presentation. If you have not received the appropriate Background Statements, be sure to get them before the hearing from Volkswagen or from the FTC. (Federal Trade Commission, Division of Enforcement, 6th and Pennsylvania Ave., N.W., Washington, D.C. 20580) 2. List any witnesses who may have information about your complaint, such as mechanics or sales personnel. Try to contact them, if you want them to testify in person or to submit written information. You are responsible for your [9] witnesses’ submission of information. If you want them to testify in person, keep them informed about the time and place of the hearing.

3. List in chronological order the actions you took to resolve this dispute. Clearly state what the problem is, and why you think the company is responsible. * To whom did you first speak? * When did this happen? * What did they tell you, and/or what action did they take? * Were other business/service persons involved? -Who? -When? -Why? —-What did they tell you and/or what action did they take? (Written statements or the presence of witnesses are preferable to your statements, if these are important to your case.) WHAT HAPPENS AFTER THE ARBITRATOR MAKES A DECISION? + 8 ke ee The arbitrator may take up to 10 days after the hearing to make a decision. The written decision and the arbitrator’s reasons for the judgment will be sent to you. With that decision will be a form which asks you to accept or reject it. VOLKSWAGEN OF AMERICA, INC., ET AL. _ 463 392 Decision and Order If you accept it, Volkswagen is legally bound to comply. If the arbitrator’s decision awards you money, Volkswagen must pay you that amount within 45 days of the date you accept the decision. If the arbitrator orders Volkswagen to repair your car, that repair must be performed within 30 days of the date you accept the arbitrator’s decision, unless the arbitrator modifies the deadline for good cause shown. If you notify the BBB that the repair ordered was not performed or was performed unsatisfactorily, the arbitrator will have 30 days from the date you notify the BBB of that fact to forward a final decision. ;

If you do not think the manufacturer has complied with the decision, you first should contact the BBB or the FTC (Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 6th and Pennsylvania Ave., N.W., Washington, D.C. 20580 (202) 326-3037). However, you also may take the award to an appropriate court and have it enforced as if it were a judgment or order of the court—without a rehearing of the case.

If either party believes the final decision contains errors of fact or is unclear, the party may petition the BBB to request [10] the arbitrator to modify or clarify the matter. This is done by making a written request to the BBB which, if it finds the request to have merit, will make a copy for the other party’s response, and then will send both documents to the arbitrator. The arbitrator’s response to such a request is final.

Of course, if you reject the arbitrator’s decision, Volkswagen is not obligated to do anything. You then are free to pursue other legal courses of action. CONFIDENTIALITY OF PROCEEDINGS It is BBB policy that the mediation and arbitration process is private and confidential. The BBB will not release results of your case to the media or to any other group or organization. It may, however, release records when this is required by law, by the Federal Trade Commission, or by judicial or governmental administrative proceedings. Records are maintained by the BBB to comply with the audit and record-keeping requirements of the FTC, which will monitor this program. If you have any problems or complaints about the arbitration process, contact the Federal Trade Commission, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 6th and Pennsylvania Ave., N.W., Washington, D.C. 20580. ATTACHMENT G BROCHURE FOR CLAIMANTS DESCRIBING THE AUTO LINE PROGRAM FOR INTERNAL ENGINE COMPONENT CLAIMS ON VOLKSWAGEN AND AUDI VEHICLES WHAT IS AUTO LINE? AUTO LINE is an out-of-court program run by Better Business Bureaus to settle disputes between consumers and certain automobile manufacturers who agree to arbitrate complaints about their products and repairs. It includes a mediation service to settle claims voluntarily.

AUTO LINE is-being used to implement a settlement of a 1981 lawsuit between Volkswagen of America and The Federal Trade Commission (FTC). As part of that settlement, Volkswagen will mediate and arbitrate consumer complaints involving the failure, malfunction, repair or replacement of internal engine components on any Volkswagen of Audi vehicle, regardless of model year distributed by Volkswagen of America, warranted in writing by Volkswagen of America, or certified by the manufac- Decision and Order 110 F.T.C.

turer as meeting applicable federal safety and emissions standards. The engine components subject to the AUTO LINE program consist of all gasoline and diesel engine parts, components, and subassemblies included within the complete short block and cylinder head assemblies, including the short block and cylinder head, camshafts, valve train components, timing gears, flywheels, pistons, piston rings, crankshafts, connecting rods, and bearings, oil pumps, and associated fasteners, seals and gaskets. Because some special provisions apply, this brochure only describes the AUTO LINE program for problems involving engine components on Volkswagen and Audi vehicles. The FTC/Volkswagen/Audi settlement provides that anyone who owns or leases one of those vehicles at the time the claim is referred to the BBB who has a claim involving one or more of the engine components noted above may use AUTO LINE to resolve it. If the consumer sells the car before the hearing, though, some special procedures must be followed. SEE page 7 for these important instructions. This mediation and arbitration process is free of charge to the consumer. If efforts at mediation fail, or if the consumer elects to bypass the mediation phase, the BBB-appointed arbitrator will conduct a fact-finding hearing and make a decision in the matter. If the consumer accepts the decision, Volkswagen must do as the arbitrator directs. This booklet [2] describes the BBB AUTO LINE program and tells you how to participate in the arbitration process.

In addition, Volkswagen has agreed with the FTC to use AUTO LINE to resolve problems involving excessive oil consumption and engine damage due to lack of oil in 1974-1979 Volkswagen and Audi vehicles equipped with water-cooled, gasoline-powered engines. Also, VW has a voluntary program to arbitrate certain complaints for other parts of the car. If your dispute concerns an oil-related problem with the 1974 to 1979 vehicles or a problem with another component (such as the brakes), you must write to Volkswagen or call your local Better Business Bureau to receive a different brochure about these programs.

The AUTO LINE Program offers:

* A mediated resolution of the dispute by BBB staff; * Arbitration of claims if mediation has been unsuccessful or if the consumer elects to bypass mediation;

* A broad-based pool of trained volunteers from the local community who, as neutral arbitrators, decide the case;

* Arbitrators who are chosen by the consumer; * Procedures that are informal and allow consumers to present their own cases. Under the AUTO LINE Program:

Mediation is voluntary;

* The arbitration hearing must be completed within 60 days after the consumer enters the program;

* Consumers can present their case in person, by telephone, or in writing; * Hearings are private unless the consumer agrees to have public observers; * An on-site vehicle inspection by an independent technical adviser to the arbitrator is available, if necessary;

* Consumers can pursue other available remedies if they do not accept the arbitrator’s decision;

* Mediation and arbitration will be monitored by the Federal Trade Commission. [3], How Long Does Auto Line Take? Volkswagen and the FTC have agreed that specific deadlines shall govern the mediation and arbitration process.

* Ifyou elect to mediate your claim, mediation and arbitration, if necessary, shall be completed within 60 days from the day the BBB receives information stating VOLKSWAGEN OF AMERICA, INC., ET AL. 465 392 Decision and Order your model, model year, Vehicle Identification Number and a statement describing the nature of your complaint.

* Ifthe arbitrator orders Volkswagen to give you a money settlement, it must be paid within 45 days of the date you accept the decision. * If the arbitrator orders Volkswagen to repair your car, the repair must be performed within 30 days of the date you accept the arbitrator's decision, except that the 30 day deadline for repair can be shortened or lengthened at the hearing for good cause shown. If a repair is ordered; and you notify the BBB that the repair ordered was not performed or was performed unsatisfactorily, the arbitrator will have 30 days from the date you notify the BBB of that fact to forward a final decision.

* These 45- and 30-day deadlines also apply to any settlement you may reach with Volkswagen during the mediation process. , If any of these deadlines are missed, Volkswagen may have violated the agreement between it and the FTC. If this happens, you may inform the FTC (Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 6th and Pennsylvania Ave., N.W., Washington, D.C. 20580). However, if a delay is caused by you (for example, if you request an extension of time in which to prepare for your hearing or if you ask that the hearing be rescheduled for a later, more convenient date), that time is not counted.

BEGINNING THE AUTO LINE PROGRAM To enter the AUTO LINE program you must obtain the form entitled “Agreement to Arbitrate” from the BBB. To obtain the “Agreement to Arbitrate from the BBB, call the BBB’s toll-free number, (800-) , or write to the BBB at Tell the BBB your name, address, telephone number, the make and model year of your car, and whether your claim involves an engine component.

If you wish to enter the AUTO LINE program, complete the BBB form with as much information as possible and promptly return it [4] to the BBB. Try to include the make, model, year and, the Vehicle Identification Number (VIN) of the car, together with a statement describing your problem. These are the most critical pieces of information, but other parts of the form are also important, including what you want VW to do. This must be stated because the arbitrator’s authority is limited to what you write on the form. (For example, if you request a refund of $100, the arbitrator cannot award you more than the amount you have requested.) Remember, also, to enclose copies of any documents you have that may help prove your case. If you no longer have copies of repair bills or cancelled checks, you might contact the repair shop or your bank or credit card company for copies.

THE MEDIATION STAGE If you choose to participate in mediation, the BBB will review your claim and then review the position of Volkswagen. The BBB will try to achieve an informal resolution by serving as an intermediary between you and Volkswagen. If you negotiate a settlement with Volkswagen yourself, let the BBB know, so such a settlement can be verified. Should the BBB mediation efforts fail, an arbitration hearing will be scheduled automatically.

If at any time, you decide that you do not want the BBB to continue seeking a mediated settlement of your complaint, or if you prefer not to try mediation, notify the BBB in writing. In either case, the agreement between the FTC and Volkswagen requires that the arbitration hearing be completed within 60 days of your request for mediation or arbitration.

Decision and Order 110 F.T.C.

THE ARBITRATION PROCESS It is important for you to know what issues Volkswagen will arbitrate and those which it need not arbitrate. Volkswagen must arbitrate your claims for the cost of completed repairs,—including the estimated cost for a repair involving internal engine components that had not been performed but that was still needed when you sold the car (BE SURE to follow the instructions on page 7, if you decide to sell your car), and for expenses related to your complaint. Examples of such expenses include the cost of towing, rental cars, telephone calls, storage fees for your car, and hotel bills. The maximum amount you may claim is what you paid for the car plus related expenses. Issues that may not be arbitrated in the BBB program include punitive damages, loss of business income, insurance claims, personal injury and property damage claims, and allegations of fraud or other violations of criminal law. Such issues are best [5] dealt with in a court of law, and you are free to pursue such claims outside the context of arbitration.

Remember, this brochure only covers the program to resolve engine problems. If your complaint concerns another component, you may be eligible under VW’s voluntary program. Call your local BBB office for details. Who Are The Arbitrators? Thousands of volunteers from all walks of life serve the BBB as arbitrators—decision makers—in these cases. They include professionals, educators, retirees, lawyers, housewives, and others, who have gone through a special training program. Arbitrators are not employed by the BBB, nor are they paid for their services. They perform this duty as a public service. All arbitrators are required to disclose, as a condition of hearing a case, any financial, commercial, professional, social or familial relationship—no matter how remote—with any of the parties or their counsel. No more than one-third of the arbitrators on the selection list sent to you by the BBB may be persons at a supervisory level in a company that makes, services, or sells a product. In all cases, your dispute will be decided by someone who is completely independent and has no vested interest in the outcome.

Choosing An Arbitrator Although state law and BBB policies offer various means of choosing arbitrators, normally you will be given a list of trained community volunteers together with a brief biography of each. You will be asked to cross off any arbitrator with whom you may have a business, financial, or social relationship, to select the arbitrator who is your first choice, and to indicate your priority preference (“"1”, “2,” “3,” etc.) for the remaining names. Where state law requires it, a panel of three arbitrators may decide your case. VWoA will take no part in the selection of the arbitrator. After you have returned your arbitrator choices to the BBB, along with an indication of the times when you will not be available to attend a hearing, the BBB will tell you when and where the hearing is to be held. If you have chosen to present your case in writing or by telephone, you also must make that choice known to the BBB. [6] What Does Arbitration Cost? The agreement between Volkswagen and the FTC requires Volkswagen to pay the costs of AUTO LINE. You will have no costs unless you choose to bring your own paid witnesses or retain an attorney. Copies of records and documents that are a part of the hearing will be available to you at any time for a reasonable cost. Also, if you want a recording of the entire proceedings, you must pay recording expenses. VOLKSWAGEN OF AMERICA, INC., ET AL. 467 392 Decision and Order The Hearing The actual hearing is an informal session. It is designed to ensure that you and Volkswagen’s representative get a full opportunity to describe the dispute to the arbitrator.

Normally, arbitration hearings are held at the BBB during regular working hours; however, the BBB will schedule a time and place convenient to you and to the others involved.

The hearings usually feature in-person presentations, during which each side presents its case to an arbitrator and all have an opportunity to ask questions, including the arbitrator. Most consumers choose to have in-person hearings, and the BBB believes this is the best way of getting all the facts before the arbitrator. However, you also have the option of presenting your case by telephone or in writing. A Volkswagen representative usually will attend the hearing to present its case. However, Volkswagen, at its option, also may choose to present its case by telephone or mail (if you appear in person), or by mail (if you present your case by telephone). You always may present your case in person, even if Volkswagen does not. You may be represented by an attorney or other spokesperson, bring witnesses and present documents, bills, and any other information to prove your case. If you are being represented by a lawyer, tell the BBB as soon as possible so that Volkswagen can be given an opportunity to get legal counsel. At no time may you or your representative or Volkswagen or its representative contact the arbitrator without the other party being present. All communications relating to the arbitration must be directed through the BBB. It will forward all information and make sure the other side gets copies when necessary. When Are Inspections And Technical Advisers Involved? Sometimes the arbitrator will want to see the car or the repair work to get a full understanding of the facts. The BBB [7] will send you a notice of the inspection time and place. You should be present for such an inspection, and you have a right to bring your own expert if you wish. Should the arbitrator request a technical adviser, the BBB will identify experts in the community who have no relationship with any party and are not potential competitors of Volkswagen. WHAT TO DO IF YOU WANT TO SELL YOUR CAR RIGHT AWAY If you decide to sell your car after you notify the BBB, but before the arbitration hearing, this is what you must do to remain eligible for the arbitration program: 1. You must notify Volkswagen at least ten days in advance that you intend to sell the vehicle; and 2. You must give Volkswagen an opportunity to inspect the vehicle before it is sold; If you sell the vehicle before the problem that prompted the claim is repaired, your recovery will be limited to the estimated repair costs (plus expenses for towing, storage fees, rental car costs, telephone and hotel bills); If you arbitrate a claim for an unrepaired problem on a car that you sold, the party that had the problem repaired is not eligible for arbitration for that problem; likewise, you may not arbitrate a claim for which a previous owner of the car had already accepted an arbitration award.

HOW TO PREPARE FOR ARBITRATION? Before coming to the hearing, you should prepare an outline of your argument to help you in your presentation. In that way, you won’t forget important points in your favor. To assist you in your preparation, a checklist is given at the end of this section. Decision and Order 110 F.T.C.

Also, before coming to the hearing, you should prepare a list of questions you want to ask Volkswagen. During the hearing, you can add to your list of questions. Include anything new that occurs to you when you hear what the other side has to say. After you state the facts as you see them, Volkswagen has a right to ask you questions. After Volkswagen has stated the facts as they see them, you have the same right to ask them questions. To clarify uncertain areas and to gain a fuller understanding of the dispute, the arbitrator also is trained to ask questions. [8] After each side has presented its case and the questioning is completed, you should be prepared to give a summary of your position. Try to describe the weak points in Volkswagen’s case, deal with any questions that have not otherwise been answered, and tell the arbitrator exactly what kind of decision you want and why. Remember that the sole purpose of the hearing is to allow the arbitrator to gather and sort the facts and thus make a fair decision. You should be prepared to convince the arbitrator that your position is right and that your opponent’s is wrong. A friendly, sincere approach works best. You are there because you and Volkswagen have a disagreement, but keep that disagreement factual and within the bounds of normal courtesy and conventional language. Bombarding an arbitrator with technical jargon will not be productive, nor will rudeness, arguing with the arbitrator, or belittling your opponent. Put yourself in the arbitrator’s position—a volunteer whose only purpose is to help you resolve your dispute. Use common sense about how to proceed. An Arbitration Checklist Given here is a checklist to help you prepare for your arbitration hearing. Use whatever items are appropriate to your case; some may not apply. 1. Collect and bring to the hearing all available written information relating to the car and your dispute, especially those noted below. Bring original documents, if possible, and copies for the arbitrator and for the Volkswagen representative. If you do not have documents, sometimes you can get copies from your repair shop, bank, or credit card company. Remember that, although documents are helpful, you are still eligible for a hearing even if you do not have them. Documents that might be useful include: purchase contract/finance agreements; purchase date, price, etc.; * vehicle repair, service, or maintenance records; * proof of repair or maintenance payments; * correspondence between you and the dealer or manufacturer; 2. List.any witnesses who may have information about your complaint, such as mechanics or sales personnel. Try to contact them, if you want them to testify in person or to submit written information. You are responsible for your [9] witnesses’ submission of information. If you want them to testify in person, keep them informed about the time and place of the hearing.

8. List in chronological order the actions you took to resolve this dispute. Clearly state what the problem is, and why you think the company is responsible. * To whom did you first speak? * When did this happen? * What did they tell you, and/or what action did they take? * Were other business/service persons involved? -Who? -When? -Why? -What did they tell you and/or what action did they take? '- (Written statements or the presence of witnesses are preferable to your statements, if these are important to your case.) VOLKSWAGEN OF AMERICA, INC., ET AL. 469 392 Decision and Order WHAT HAPPENS AFTER THE ARBITRATOR MAKES A DECISION? The arbitrator may take up to 10 days after the hearing to make.a decision. The written decision and the arbitrator’s reasons for the judgment will be sent to you. With that decision will be a form which asks you to accept or reject it. If you accept it, Volkswagen is legally bound to comply. If the arbitrator’s decision awards you money, Volkswagen must pay you that amount within 45 days of the date you accept the decision. If the arbitrator orders Volkswagen to repair your car, that repair must be performed within 30 days of the date your acceptance of the arbitrator’s decision is received by the BBB, unless the arbitrator rules, for good cause, that the 30 day deadline should be modified. If you notify the BBB that the repair ordered was not performed or was performed unsatisfactorily, the arbitrator will have 30 days from the date you notify the BBB of that fact to forward a final decision. Ifyou do not think the manufacturer has complied with the decision, you first should contact the BBB or the FTC (Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 6th and Pennsylvania Ave., N.W., Washington, D.C. 20580 (202) 326-3037). However, you also may take the award to an appropriate court and have it enforced as if it were a judgment or order of the court—without a rehearing of the case. [10] If either party believes the final decision contains errors of fact or is unclear, the party may petition the BBB to request the arbitrator to modify or clarify the matter. This is done by making a written request to the BBB which, if it finds the request to have merit, will make a copy for the other party’s response, and then will send both documents to the arbitrator. The arbitrator’s response to such a request is final. Of course, if you reject the arbitrator’s decision, Volkswagen is not obligated to do anything. You then are free to pursue other legal courses of action. CONFIDENTIALITY OF PROCEEDINGS It is BBB policy that the mediation and arbitration process is private and confidential. The BBB will not release results of your case to the media or to any other group or organization. It may, however, release records when this is required by law, by the Federal Trade Commission, or by judicial or governmental administrative proceedings. Records are maintained by the BBB to comply with the audit and record-keeping requirements of the FTC, which will monitor this program. If you have any problems or complaints about the arbitration process, contact the Federal Trade Commission, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 6th and Pennsylvania Ave., N.W., Washington, D.C. 20580. Decision and Order ATTACHMENT H(1) Syaae Set See ares, Sa Now, every Volk wagen Is even more responsive.

At Volkswagen, were proud fo produce automobiles that are known for performance os well as volve. Performance is important to us as a company, 00. For exemple, in the unlikely event a Volkswagen: doesn perform up fo your expectations, we've sel up © program to make sure you get o prompt response. And a fair one. In cooperation with the Council of Better Business Bureaus, we have a free third-party orbitretion program. The program benefits all current and, in some cases, former Volkswagen owners.

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GOLF + GTi + JETTA + CABRIOLET + SCIROCCO + QUANTUM + YANAGON VOLKSWAGEN OF AMERICA, INC., ET AL.

Decision and Order ATTACHMENT H (2) Ver CONSTI Br Iv need automo Uquatity for over fifty pode in our weer ducins techno bijes af the hi years. And we take tron of excellent sen n. you shouh! ever _ nave te do is call toll-free 1-800-822-AUDI. The program benefits all current and. in some cases. former Audi owners. Ci course. ihe program is free. Just ask your dealer for the complete derails.

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- 472 FEDERAL TRADE COMMISSION DECISIONS Decision and Order 110 F.T.C.

ATTACHMENT I 1) Weiss cata Now, ,every Volkswagen is even more responsive.

“Al Volkswagen, were proud !o produce outomo- third-party arbitration progrom. The program benebiles that are known for performance as well as fits all current and, in some cases, former velue. Pecformonce is impersnt tc us a3 a company, oo. Volkswagen owners.” For example, in the unlikely event a Volkswagen: To resolve a problem quickly, first see your doesn't perform up to your expectations, weve set Volkswagen deoler. Or call 1-800-123-4567 ta sec if Up 6 program fo make sure you get o prompt our problem-solving program can work for you. resoonse. And a fair one. In cooperction with the We hope you'll never need this responsive ov ~ Council of Better Business Bureaus, we have a free grom. But its avoilable if you do. GOLF + GTI + JETTA . CABRIOLET + SCIROCCO + QUANTUM « VAHAT CS Cote Tiles wn EOF wots comed VoNswagen ve! Hes Ory Oro. toh or engine domoge Irom lack cf iubncaton are 0'50 elig:b'e lor our prog Gon ONG Ey WH PRE OS VOLKSWAGEN OF AMERICA, INC., ET AL.

Decision and Order ATTACHMENT I (2) That option is a special third-party arbitration program that the people of Audi have arranged with the Better Business Bureau.

At Audi. we've been consistently producing technologically advanced automo biles of the highest quality for over fifty years. And we take great pride in our tradihave ‘to do is call toll-free 1-800-822-AUDI. The program benefits all currenyand, in some cases. former Audi owners: Of course. the program is free. Just ask your dealer for the complete details.

Naturally. the first step in solving any problem is your owner's manual. and then tion of excellent service.

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*Previous owners of 1974-1979 Audi vehicles with gasoline engines who have claims for unsatisfactory oil consumption or engine damage from lack of lubrication are also eligible for our program.

Concurring Statement 110 F.T.C.

CONCURRING STATEMENT OF CHAIRMAN DANIEL OLIVER The consent order in this matter contains a number of injunctive relief provisions, and provides consumer redress in the form of a Commission-supervised arbitration process administered by the Better Business Bureau. Although I believe these provisions satisfy the Commission’s concerns, the negotiated order is not one I would have chosen. I am nevertheless reluctant to suggest order revisions that might throw this matter back into the costly litigation that has already consumed many years of Commission resources. Accordingly, I have voted in favor of final acceptance of the consent order. Two aspects of the final order concern me. First, I would have preferred an order without the prospective redress provisions in the arbitration mechanism. That mechanism resolves not only consumer disputes regarding the defects cited in the complaint, but also other internal engine component problems. Although this mechanism is similar to the relief obtained from another automobile manufacturer in a related matter (see General Motors consent order, D-9145), I do not favor its general application.

To begin with, the arbitration mechanism is needlessly regulatory. If Volkswagen (““VWoA”) wants to negotiate and resolve consumer complaints through a Better Business Bureau arbitration scheme, it should certainly be free to do so. However, active government supervision of such a scheme forces the government to maintain an active presence in the operation of a domestic auto seller for the next 8 years. Moreover, the prospective redress provisions will grant relief primarily to consumers who were not injured by the violations alleged in the complaint. In future consent orders where consumer redress is warranted, I would prefer redress provisions that confer benefits on the injured parties.

I would also have preferred to see the Commission—as an exercise of its discretion—permit VWoA to exclude members of two class actions from the coverage of the “specified claims” portion of the consent order.1 The Estruch and Nosse class action settlements were statewide settlements—respectively filed in New York and California state courts—that established arbitration programs for repair and expense claims like those covered under the “specified claims” provisions, using procedures similar to those created by the Commission order.

“T Three class actions have been settled or decided since VWoA signed the proposed order on April 14, 1986. A jury verdict was rendered in favor of VWoA in a North Carolina federal district court class action in Deadwyler v. Volkswagen of America, Inc. and Volkswagen AG, ST-C-85-38 (W.D.N.C. June 19, 1987), appeal pending (hereinafter Deadwyler). A class action settlement was approved by a California state court in Nosse, et al. v. Volkswagen of America, Inc., No. 780024 (Cal. Supr.Ct., City and County of San Francisco, July 1, 1986) (hereinafter Nosse). A second settlement agreement was approved by a New York state court in Estruch, et al. v. Volkswagen of America, Inc. et al., Index No. 1733/81 (N.Y.Sup.Ct., Monroe County, April 23, 1987) (hereinafter Estruch). VOLKSWAGEN OF AMERICA, INC., ET AL. 475 392 Concurring Statement In Estruch, all class members were informed of the existence of the Commission’s arbitration program, and the notice to that effect made it clear to class members that they had two mutually exclusive choices: they could either (1) opt out of the class and file their claims under the Commission program, or (2) remain in the class and not participate in the Commission program. Because they were able to make a knowing choice between the Estruch class action and the Commission order, I believe that the “specified claims” portion of the Commission order should not cover members of the Estruch class.? In Nosse, class members were not informed of the existence of the Commission arbitration program.3 However, the Nosse settlement established a redress program that provides many of the same benefits available under the “specified claims” portion of the Commission order.4 Class members who are dissatisfied with the redress that VWoA offers in disposition of their claims may appeal through arbitration procedures similar to those incorporated into the Commission program. In short, VWoA’s compliance with the terms of the Nosse’ settlement in effect satisfies its obligations under the Commission order with respect to members of the Nosse class. There is no reason to require VWoA to establish a program in California to handle claims that have already been evaluated and determined. Indeed, requiring a duplicative program may mislead consumers as to the utility of participating in the Commission program. Arbitrators handling claims under the Commission order are not likely to award redress that duplicates redress already received under the Nosse settlement.

I have voted in favor of final acceptance of the Commission order because I believe that it is clearly preferable to the litigation alternative. However, for the foregoing reasons, I would prefer an order that more closely adhered to the contours of the complaint in this matter, and that did not duplicate the redress already available to consumers under state court settlements.

In5 1 3 5 6 2 853 1945 124 51 82.592735 Deaduyler,5 1 3 5 6 3 989 1945 34 51 96.977333 thes 1 3 5 6 4 1032 1966 68 20 96.844688 notices 1 3 5 6 5 1111 1968 21 18 96.470505 to5 1 3 5 6 6 1141 1965 54 21 96.470505 class5 1 3 5 6 7 1204 1965 106 20 96.785858 members5 1 3 5 6 8 1319 1965 44 19 96.500740 also5 1 3 5 6 9 1372 1963 121 21 96.504456 mentioned5 1 3 5 6 10 1503 1964 36 20 96.738930 thes 1 3 5 6 11 1549 1963 139 20 96.738930 Commissions 1 3 5 6 12 1698 1962 68 20 96.448380 order.5 1 3 5 6 13 1777 1962 109 22 96.479050 However,5 1 3 5 6 14 1897 1962 22 19 96.041496 in5 1 3 5 6 15 1928 1967 36 18 96.041496 my5 1 3 5 6 16 1973 1961 60 23 96.922653 view,5 1 3 5 6 17 2043 1960 36 20 97.005524 thea 1 3 5 7 0 773 1993 1306 30 -1 5 1 3 5 7 1 773 2001 69 19 97.005829 notices 1 3 5 7 2 850 2000 35 20 96.667442 did5 1 3 5 7 3 892 2002 37 18 95.605080 not5 1 3 5 7 4 937 2000 63 20 95.605080 makes 1 3 5 7 5 1008 2000 17 20 96.871178 it5 1 3 5 7 6 1032 1999 128 24 95.506836 sufficiently5 1 3 5 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2030 105 20 96.908470 members5 1 3 5 8 9 1515 2030 24 20 96.882103 of5 1 3 5 8 10 1546 2029 36 21 93.268738 thes 1 3 5 8 11 1594 2028 121 25 92.062500 Deadwyler5 1 3 5 8 12 1724 2028 54 21 96.936554 class5 1 3 5 8 13 1788 2028 54 20 96.212639 from5 1 3 5 8 14 1852 2028 148 25 95.484283 participation5 1 3 5 8 15 2011 2027 22 20 95.484283 in5 1 3 5 8 16 2043 2026 37 21 96.836555 thea 1 3 5 9 0 774 2067 254 25 -1 5 1 3 5 9 1 774 2067 139 20 96.220818 Commissions 1 3 5 9 2 923 2073 105 19 96.146080 program.3 1 3 6 0 0 775 2094 1306 129 -1 4 1 3 6 1 0 799 2094 1282 26 -1 5 1 3 6 1 1 799 2101 8 14 62.021900 35 1 3 6 1 2 813 2100 43 20 62.021900 Thes 1 3 6 1 3 863 2100 68 20 96.267708 notices 1 3 6 1 4 938 2100 78 20 96.640137 mailed5 1 3 6 1 5 1022 2102 22 17 93.261032 to5 1 3 6 1 6 1051 2100 64 19 92.406197 Nosse5 1 3 6 1 7 1121 2099 54 20 96.909172 class5 1 3 6 1 8 1180 2098 106 21 96.942741 members5 1 3 6 1 9 1292 2098 35 20 96.829056 did5 1 3 6 1 10 1333 2097 82 21 96.734894 includes 1 3 6 1 11 1423 2103 12 14 96.734894 a5 1 3 6 1 12 1441 2097 102 20 96.564766 standards 1 3 6 1 13 1549 2097 79 19 96.912796 waivers 1 3 6 1 14 1635 2096 107 24 96.671959 provisions 1 3 6 1 15 1748 2096 80 23 96.992195 stating5 1 3 6 1 16 1834 2095 47 20 93.000931 that5 1 3 6 1 17 1888 2094 65 25 79.003448 “[t]he5 1 3 6 1 18 1960 2094 121 19 96.712898 settlement4 1 3 6 2 0 775 2126 1306 30 -1 5 1 3 6 2 1 775 2134 25 19 96.726479 of5 1 3 6 2 2 804 2134 42 19 96.726479 this5 1 3 6 2 3 854 2134 69 19 96.766083 actions 1 3 6 2 4 931 2133 42 19 96.725281 will5 1 3 6 2 5 981 2133 39 19 96.623192 bars 1 3 6 2 6 1028 2139 42 17 96.910812 any5 1 3 6 2 7 1078 2133 53 19 96.937569 class5 1 3 6 2 8 1138 2132 95 20 96.333267 members 1 3 6 2 9 1241 2132 54 19 96.005310 from5 1 3 6 2 10 1303 2131 134 24 96.005310 prosecuting5 1 3 6 2 11 1445 2136 41 18 96.868675 any5 1 3 6 2 12 1495 2130 83 19 96.627045 furthers 1 3 6 2 13 1586 2130 78 22 96.621170 claims,5 1 3 6 2 14 1673 2129 107 23 96.919846 including5 1 3 6 2 15 1788 2130 99 20 96.959335 contract,5 1 3 6 2 16 1896 2129 113 22 96.603142 warranty,5 1 3 6 2 17 2017 2126 64 20 95.881363 fraud4 1 3 6 3 0 775 2160 1306 31 -1 5 1 3 6 3 1 775 2167 41 20 96.238693 ands 1 3 6 3 2 823 2167 96 24 96.629501 punitive5 1 3 6 3 3 926 2166 107 25 96.860825 damages,5 1 3 6 3 4 1041 2166 68 19 96.239487 which5 1 3 6 3 5 1117 2166 54 19 96.239487 have5 1 3 6 3 6 1178 2165 53 20 96.408035 been5 1 3 6 3 7 1239 2171 23 13 96.913605 or5 1 3 6 3 8 1269 2164 60 20 96.296150 could5 1 3 6 3 9 1336 2164 55 20 96.874222 have5 1 3 6 3 10 1398 2163 53 20 96.514503 been5 1 3 6 3 11 1458 2163 95 20 96.680717 asserted5 1 3 6 3 12 1561 2163 90 23 96.329979 relating5 1 3 6 3 13 1657 2164 22 18 96.438866 to5 1 3 6 3 14 1686 2162 37 19 96.524979 thes 1 3 6 3 15 1729 2163 90 18 96.421967 matters5 1 3 6 3 16 1825 2160 82 25 96.312683 alleged5 1 3 6 3 17 1914 2160 22 20 95.945213 in5 1 3 6 3 18 1943 2160 42 19 95.945213 this5 1 3 6 3 19 1992 2160 89 19 96.855667 action.”4 1 3 6 4 0 775 2197 603 26 -1 5 1 3 6 4 1 775 2199 19 21 96.783035 It5 1 3 6 4 2 803 2199 36 21 96.783035 did5 1 3 6 4 3 849 2202 41 21 96.898186 not,5 1 3 6 4 4 901 2199 105 23 96.904236 however,5 1 3 6 4 5 1017 2199 56 20 96.877068 refers 1 3 6 4 6 1083 2201 22 17 96.405914 to5 1 3 6 4 7 1114 2198 37 20 96.766823 thes 1 3 6 4 8 1161 2197 139 21 96.398598 Commissions 1 3 6 4 9 1310 2197 68 21 96.550301 order.3 1 3 7 0 0 775 2226 1306 97 -1 4 1 3 7 1 0 799 2226 1282 31 -1 5 1 3 7 1 1 799 2235 8 13 64.491928 45 1 3 7 1 2 815 2234 40 20 64.491928 For5 1 3 7 1 3 862 2233 102 24 93.272919 example,5 1 3 7 1 4 973 2233 76 20 73.408508 VWoA5 1 3 7 1 5 1057 2232 40 20 95.819344 will5 1 3 7 1 6 1105 2232 157 23 96.605820 automatically5 1 3 7 1 7 1270 2237 41 19 96.891449 pays 1 3 7 1 8 1321 2231 37 20 94.991608 1005 1 3 7 1 9 1366 2233 85 22 96.804779 percent5 1 3 7 1 10 1458 2230 25 20 96.908241 of5 1 3 7 1 11 1486 2230 53 24 96.796936 fully5 1 3 7 1 12 1546 2229 139 20 96.169205 documented5 1 3 7 1 13 1693 2228 152 20 96.626274 reimbursable5 1 3 7 1 14 1853 2228 82 24 95.675407 repairs5 1 3 7 1 15 1942 2226 42 21 93.305580 ands 1 3 7 1 16 1991 2226 90 20 92.674065 inciden-4 1 3 7 2 0 775 2259 1306 32 -1 5 1 3 7 2 1 775 2268 29 19 96.344193 tals 1 3 7 2 2 811 2273 102 18 96.770607 expenses5 1 3 7 2 3 921 2266 98 21 96.740662 incurred5 1 3 7 2 4 1027 2266 76 24 96.587036 during5 1 3 7 2 5 1110 2265 36 20 95.851265 thes 1 3 7 2 6 1153 2265 49 20 95.851265 firsts 1 3 7 2 7 1208 2265 72 22 96.730095 50,0005 1 3 7 2 8 1287 2264 80 20 93.285408 vehicles 1 3 7 2 9 1375 2263 127 21 91.876709 miles—ands 1 3 7 2 10 1509 2269 41 18 96.968163 pays 1 3 7 2 11 1558 2262 25 20 96.917732 505 1 3 7 2 12 1591 2264 86 23 96.909462 percent5 1 3 7 2 13 1684 2262 25 19 96.960411 of5 1 3 7 2 14 1712 2262 52 19 96.689255 such5 1 3 7 2 15 1771 2267 102 19 96.640427 expenses5 1 3 7 2 16 1880 2259 99 21 96.739685 incurred5 1 3 7 2 17 1985 2259 96 20 96.307060 between4 1 3 7 3 0 775 2293 1306 30 -1 5 1 3 7 3 1 775 2300 71 23 96.163445 50,0005 1 3 7 3 2 853 2302 22 18 96.826347 to5 1 3 7 3 3 883 2300 71 23 94.178581 75,0005 1 3 7 3 4 961 2299 82 21 93.270439 vehicles 1 3 7 3 5 1050 2298 119 21 93.105347 miles—for5 1 3 7 3 6 1175 2298 73 20 96.924858 claims5 1 3 7 3 7 1255 2298 47 20 96.977242 that5 1 3 7 3 8 1309 2297 68 20 96.687881 would5 1 3 7 3 9 1384 2297 25 20 97.005539 be5 1 3 7 3 10 1417 2296 156 21 96.652306 characterized5 1 3 7 3 11 1580 2302 24 14 96.835464 as5 1 3 7 3 12 1612 2295 112 25 90.464386 “specified5 1 3 7 3 13 1731 2295 85 20 96.534851 claims”5 1 3 7 3 14 1823 2294 68 20 96.997658 under5 1 3 7 3 15 1898 2294 36 20 96.871086 thes 1 3 7 3 16 1942 2293 139 21 96.212326 Commission2 1 4 0 0 0 775 2326 1306 64 -1 3 1 4 1 0 0 775 2326 1306 64 -1 4 1 4 1 1 0 775 2326 1306 30 -1 5 1 4 1 1 1 775 2334 67 19 96.763641 order.5 1 4 1 1 2 850 2333 79 20 93.917374 Claims5 1 4 1 1 3 935 2335 37 18 96.954971 not5 1 4 1 1 4 979 2333 52 23 96.417252 fully5 1 4 1 1 5 1038 2331 139 21 96.714996 documented5 1 4 1 1 6 1184 2331 41 20 96.661819 will5 1 4 1 1 7 1231 2331 26 20 96.985695 be5 1 4 1 1 8 1264 2331 91 25 96.947800 rejected5 1 4 1 1 9 1361 2330 27 24 93.305885 by5 1 4 1 1 10 1396 2330 75 20 91.266716 VWoA5 1 4 1 1 11 1478 2330 48 23 96.580070 only5 1 4 1 1 12 1534 2329 70 20 93.301262 where5 1 4 1 1 13 1611 2328 76 20 85.933037 VWoA5 1 4 1 1 14 1694 2328 39 20 96.912575 has5 1 4 1 1 15 1740 2328 125 20 95.937004 substantial5 1 4 1 1 16 1873 2333 75 14 96.416077 reasons 1 4 1 1 17 1956 2329 21 18 96.246254 to5 1 4 1 1 18 1984 2326 97 25 96.246254 question4 1 4 1 2 0 775 2366 291 24 -1 5 1 4 1 2 1 775 2367 55 19 96.648895 theirs 1 4 1 2 2 841 2366 87 24 96.837029 validity5 1 4 1 2 3 939 2372 23 14 96.593719 or5 1 4 1 2 4 973 2367 93 19 96.565323 amount. Complaint 110 F.T.C.