VW to give up to $1,000 payments to polluting diesel owners in Vermont, Arizona

By David Shepardson

WASHINGTON (Reuters) - Volkswagen AG (VOWG_p.DE) is paying owners of polluting diesel-powered vehicles up to $1,000 (749.5 pounds) in additional payments to settle state lawsuits in Vermont, the state's attorney general said on Wednesday.

VW agreed to a $6.5 million (4.9 million pounds) settlement with Vermont to resolve allegations of false advertising claims. Under the settlement, VW agreed to pay owners in the state up to $1,000 each for vehicles covered under the settlement.

Vermont and Arizona, which settled similar claims last month, are the only two states in which consumers will receive restitution payments as a result of a state enforcement action. Under court settlements, VW owners previously received between $5,100 (3,822.2 pounds) and $17,000 (12,740.8 pounds) in compensation for having polluting vehicles fixed or selling them back to the automaker.

In 2016, VW reached a $603 million (451.9 million pounds) consumer fraud settlement with 44 U.S. states. Since then it has struck settlements with five other states - including Vermont - worth more than $120 million. The only state with a pending consumer fraud action is New Mexico.

"Vermonters expect and deserve truth in advertising – especially when it comes to making decisions involving environmental impacts,” said Attorney General Thomas Donovan.

Vermont owners will receive a total of $2.9 million (2.2 million pounds) in direct consumer restitution and VW will also pay $3.6 million (2.7 million pounds) into the state's general fund.

In the Arizona settlement announced in May, VW agreed to pay $10.5 million for direct consumer payments and $20 million into the state's general fund, to be used toward its education funding shortage.

Arizona Attorney General Mark Brnovich said if the state had joined the 2016 multistate agreement, it would have received only $11 million (8.2 million pounds).

In total, VW has agreed to pay more than $25 billion (18.7 billion pounds) in the United States for claims from owners, environmental regulators, states and dealers and offered to buy back about 500,000 polluting U.S. vehicles. The buy-backs will continue through the end of 2019.

VW admitted in September 2015 to secretly installing software in nearly 500,000 U.S. cars to cheat exhaust emissions tests. The vehicles emitted up to 40 times the legally allowable pollutants.

In May, federal prosecutors in Detroit unsealed criminal charges against former VW CEO Martin Winterkorn. Two other former VW employees have pleaded guilty in the investigation and nine people in total have been charged.

Volkswagen AG has paid more than $7.4 billion (5.5 billion pounds) to buy back about 350,000 U.S. diesel vehicles through mid-February, court filings show.

(Reporting by David Shepardson; Editing by Dan Grebler)