Now more than ever, Volkswagen cannot afford to screw up in the U.S. After coming clean about its emissions cheating, the company needs to now focus on compensating the 400,000 U.S. customers who feel betrayed and whose faith in the company has been thoroughly shaken. Sadly, many already frustrated VW TDI diesel owners are now even more pissed off by the buyback claims process. Here’s why.
Any time you’ve got hundreds of thousands of people cranking out paperwork, plenty of folks are going to be unhappy—we learn this every tax season. So it should be no surprise that when 370,000 VW TDI owners have to log into VW’s claims portal to file their buyback claims, quite a few end up in a sour mood.
But while some of them are just angry because they hate paperwork, many are upset because they think Volkswagen is doing a poor job communicating perhaps the most important aspect of this buyback: timing.
Do you notice anything missing from Volkswagen’s flow chart above describing the steps in the buyback process? The answer is how long each of these steps could possibly take. And that’s a huge problem for TDI owners.
Not everyone lives in a two (or more) car household. For many Volkswagen diesel owners, their VW is their only car. And as they anticipated VW buying it back relatively soon, many have gone ahead and purchased a second vehicle, lest they be left without wheels after the buyback.
The buyback essentially allows owners to sell their car back for what it was worth back before the scandal broke in September 2015. In addition, it provides a cash restitution payment that varies from between $5.100 and about $10,000.
Sadly, the claims process is taking longer than many owners expected, in part because owners say VW hasn’t clearly communicated how long it takes for each part of the claims process to be completed, leaving some owners with two car payments—a situation which can be financially crippling over the long term.
But it’s not just those with two payments for whom the timeliness of this buyback is crucial: everyone who drives a TDI is worried they might wreck and total the vehicle, thus losing eligibility for the buyback (Update: this isn’t a huge deal, though, as they’d still be eligible for the restitution payment). Many also have maintenance items they’ve been deferring, because why pay to fix a check engine light when VW is buying the car back?
With this buyback, we’re talking about tens of thousands of dollars per customer, and that’s a lot of money to have suspended in thin air, without word on when that cash might drop down into customers’ pockets.
To be sure, Volkswagen did send a long form notice to its customers, saying:
Volkswagen also has agreed to complete a Buyback of the Eligible Vehicle within 90 days of an Eligible Owner’s acceptance of Volkswagen’s Buyback offer.
But that doesn’t at all describe how long it takes to actually get that offer after filing the claim. So I decided to dig all through the court documents related to the settlement. Here’s what I found.
Firstly, in the FTC order entitled Partial Stipulated Order For Permanent Injunction And Monetary Judgement, the court described the very latest VW could start processing claims:
...the Buyback and Lease Termination offers required under Sections VII and VIII of this Order, shall be available to Eligible Owners and Eligible Lessees beginning within 5 business days from the Effective Date and shall remain open until at least 2 years after the Effective Date.
The “Effective Date,” there is the date when the court approved the Final Rule, October 25. So that means, at the latest, Volkswagen would start processing claims November 1.
It also says VW has 10 days to look through the documents and make sure everything is filled out properly:
...within 10 business days, or more quickly if reasonable, either (a) notifying consumers that their claim application is complete because it contains all information necessary to determine eligibility.
Once VW has received a completed application, it’s got another 10 business days to process the documents and have any banks through which the owner has a lien review the docs, and provide customers with a notice of eligibility and an offer to schedule a buyback.
Notifying consumers whether they are eligible for their elected remedy within 10 business days, or more quickly if reasonable, of receiving a completed application...Immediately upon either notification that a consumer is eligible under Subsection C.3 above or the Effective Date, whichever is later, allowing that Eligible Consumer to schedule a Buyback
So, basically, this says VW has 10 business days to make sure the application is complete, and another 10 business days to send an offer letter. The problem is, many owners say VW hasn’t completed that first step after 10 days, and still others say they submitted their paperwork in September, and that step one of the process (VW making sure the application is complete) was done well before November 1. Does this mean Volkswagen had 10 days from November 1 to send out an offer?
Many forum-users and Redditors think so, and for many of them, especially those who financed their vehicles, those 10 days have come and gone.
The other document on the court’s website (United States of America v. Volkswagen AG) called Order Granting The United States Motion To Enter Proposed Amended Consent Decree, says that from October 25th, there are 15 days total for Volkswagen to start providing buyback offers:
Buyback Recall: Beginning no later than fifteen (15) Days after the Effective Date of the Consent Decree, Settling Defendants shall offer, and if accepted provide, each Eligible Owner of an Eligible Vehicle the Buyback, as defined in Paragraph 2.4, of the Eligible Vehicle at no less than the Retail Replacement Value.
It even describes a penalty for if Volkswagen does not meet this timing, saying:
...if Settling Defendants fail to initiate offers of the Buyback or the Lease Termination within 15 Days of the Effective Date... unless such time is extended in writing by EPA/CARB, Settling Defendants shall pay the following Stipulated Penalty for each Day the offer is delayed: $10,000 1st through 14th Day $25,000 15th through 30th Day $50,000 31st Day and beyond
Some VW TDI owners on Reddit have also heard that VW has 10 days to approve documents, another 10 days to go through a “third party auditor,” and another 10 days to provide buyers with an offer.
I’m confused too, honestly. And I’ve been sniffing through VW Court documents for months. No wonder owners are lost.
After confusing myself with the court documents, I decided to call Volkswagen’s Claims Hotline, which I’ve done before in the course of reporting on Dieselgate. Often it’s been very helpful.
This time I spoke with two agents, and it didn’t go well.
First Agent: Give It Ten Days
The first agent began by telling me how stressed out her team is, saying they have deal with 455,000 cars, and that there have been computer delays slowing down progress.
She did give me a timeline, though, essentially echoing what the FTC order said. I asked her why so many people haven’t received their offer within that 10 day timeframe after the documents were approved, and she said: “We are working with other issues too, and there are a lot of cars out there.”
Second Agent: There Is No Timeframe
Then I called back, and the automated “on-hold” message said all owners should give VW a month to review the documents. This agrees with that figure some Reddit users mentioned (the one with three 10-day long steps), but it conflicted with the FTC order and with what I had just been told from the other agent.
So I talked to another representative on the phone to clear this all up. Will owners really have to wait a month? Or 20 days? Her response was disconcerting:
“We are not giving out a time frame,” she said, noting that up until now, after receiving owners’ documents, VW had emailed owners saying the company would send an offer within 10 days.
But now, the representative told me, “Volkswagen has decided that there is no timeframe,” due to the overwhelming claims flowing in. She said again:
We’ve been instructed by Volkswagen to indicate to the consumer that there is no timeframe...We’re only doing what Volkswagen is telling us to do...It’s not fair. It’s not right. But unfortunately, it is what it is.
So, yes. I spoke with two representatives: one told me owners would get offers within ten days of completing documentation, the automated message said owners had to wait 30 days to have documents reviewed, and the second representative told me VW just straight-up stopped trying with the whole “deadline” thing.
Volkswagen’s very helpful claims hotline answers my calls within 15 minutes, and VW’s court settlement website has a slew of very useful information for owners. In a lot of ways, VW is doing this right.
But they are missing the most important component. They have a responsibility to their customers to clearly communicate timing associated with each step in the buyback process, without expecting owners to read through 200-plus page court documents.
While it’s true that nearly 400,000 people have filed their claims in the first 10 days, and that VW’s team is surely overwhelmed, they can’t say they didn’t see it coming.
In a November status report of Volkswagen’s settlement (and in quite a few other court documents before that), a representative from Volkswagen boasted about the high participation rate in the settlement, implying that it proves that it is fair to owners, saying:
To date, we have over 370,000 registrants on our settlement web site, over 197,000 completed claim submissions, over 70,000 document packages have been reviewed by Volkswagen for eligibility and passed on to the Claims Supervisor, or where necessary we’ve gone back to claimants and asked for more information.
So VW knew this was coming.
Still, even if we do accept that VW wasn’t prepared for the onslaught of claims, the company needs to communicate a shift in timing to its owners, because right now, owners are frustrated.
The confusion with timing has gotten so bad, Reddit user UncrunchyTaco created a VW TDI Claim Tracker spreadsheet, which has been filled out by over 1,000 TDI owners, and describes when owners went through each part of the buyback process: uploading documents, receiving verification from VW that documents are complete, getting a final offer, returning that signed offer, and scheduling a date with a dealership.
Many of them, particularly those who financed their vehicles, are upset that their documents haven’t been approved after 10 days, and many others are upset they haven’t gotten an offer 10 days after the web portal said their documents were complete, like the FTC court document seems to state.
Take reddit user tomyabo42, whose documents were marked complete on Oct. 18 (the second from the right column below), but who only received his offer on the Nov. 20 (the rightmost column below)—that’s over 10 business days. Not by much, but still. Each day counts.
Stories like this flood Reddit and car forums, and people are angry. Here’s a quote by Reddit user chewyeti, who says he’s spoken with the class-action lawyers:
VW didnt expect everyone to dump their car in the beginning of the 2 year claim window.
Failed to staff correctly, and are still ramping up.
Poor training of staff. Not empowered to fix anything
‘Paid off cars’ are 1 step easier to process, no checking with the Bank or Credit Union.
Basically, they’re overwhelmed and not much we can do as consumers. Yet we are bound to continue making payments, and they are not being held to their agreement.
Utter fucking bullshit. Done with VW for life.
jcd1388 is in the same situation, saying:
Same boat: want a new car, don’t have the money and can’t get another loan on top of my VW loan...and now it’s just really not looking good for the end of the year.
And they’ve had over a year to prepare for this. Where was the planning?
endlessly_curious chimed in, saying how important this settlement is for him:
They still have to drive their TDI and risk totaling the car and getting screwed out of a settlement that could drastically improve their financial situation. Personally, I could really use that money after being laid off earlier this year because it will restore a good chunk of my savings.
sfvalet added on:
Except like me I am stuck paying 1200 a month in car payments and I can’t afford that. I was under the assumption I would be able to trade it in this month but I can’t do this till December
gjriddle voiced frustration with timing, saying:
Did the person you spoke to give you a new timeline? Mine said that I should have an offer by December 1 and if not to call him back. Not sure where they pulled that date from, basically he said it was the 10 business days to review, then 10 business days to make offer all starting on November 1 and allowing for some lag time and holidays. Sighhhhhhhhhhhh. Also done with VW for life. Fuck this noise.
allenscape added on that his TDI is falling apart, but that he doesn’t want to spend money fixing a car that’s going to be bought back anyway:
Me, too. On top that my inspection has been expired since May because I need new struts and didn’t want to pay for that and also my DPF is cracked and needs replaced. And I’m now 500 miles overdue for the 90,000 mile service. Which I am definitely not getting done. Not even gonna change the oil.
pmcanc123 has lost faith in VW after this clumsy process, saying:
...the only thing I am mad about is VW not communicating this. Did they not anticipate that with such a good deal that people would want to rid themselves immediately? Poor planning VW.
I was going to buy a Passat TDI wagon but after the way they are handling this count me out.
TDI owners have voiced other concerns, too. Some have said dealerships only allow six buybacks per week, meaning owners get paid much later than they’d like. Many others have said they think VW is processing claims for people who own their vehicles faster than they are for people who finance their cars. And if you look at the people complaining about VW going over the “10 day” deadline, they are indeed mostly people who financed their cars.
Whether you’re an engineer running simulations or a journalist trying to track down a story, you’re going to have to give your boss some indication of timing. And if you have absolutely no clue when you’ll get it done, just guess something— throw a Scientifically Wild-Ass Guess out there, but make sure it’s on the upper bound.
You’ve got to set expectations for whoever is the customer of your work, so that they can make adjustments appropriately. In this case, we’re talking about hundreds of thousands of people, who need to be able to make major adjustments to their lives.
VW is doing a lot of things right here (and indeed, there are plenty of owners who have had success with VW’s claims process), but the company has got to get a rough timeline out to customers right now.
I’ve reached out to Volkswagen for that timeline, and they weren’t able to provide something to me quickly, further demonstrating how much of a problem this is.
They did tell me the timeline is in the court documents, but again, that’s 250 pages of litigation-speak that customers shouldn’t have to parse through, and it conflicts with other sources.
VW eventually did give me a timeline, but did admit that they haven’t sent this information to owners, who would have to read through the 250-page FTC document to find it:
The Settlement Program was initially announced on June 28, 2016 and received preliminary approval from the Court on July 26, 2016. On the same day that the Settlement Program received preliminary approval, Volkswagen launched the Online Claims Portal, which allowed customers to register online and review information about their potential options under the Settlement Program, if approved. In September 2016, customers that had registered were also able to begin uploading documents to the Online Claims Portal in anticipation of final approval of the Settlement Program. Until the Settlement Program received final approval from the Court, however, customers could not officially “submit” claims for benefits.
The Court granted final approval of the Settlement Program on October 25, 2016. Under the relevant agreements, Volkswagen was required to begin processing claims by no later than November 1, 2016. Volkswagen must process customers’ documents within 10 business days of receipt and, if customers’ documents are validated, Volkswagen then has a second 10 business days to determine customers’ eligibility and extend offers to customers. So, assuming a customer submits a claim that is complete and not deficient in any way, we are actually talking about a total period of 20 business days from submission to offer. (Note: business days excludes weekends and holidays)
Overall, we are very encouraged by the response we’ve had so far to the 2.0L TDI settlement program.
So basically, VW only started processing claims November 1, so the earliest TDI owners should expect an offer is by the end of the month (though it may come sooner).
VW admits there are issues with their unprecedented process, and that they’re in the process of making major improvements. Hopefully one of those improvements is clearing up the confusion on timing, because there’s a lot at stake.
Update 19:46: Clarified that totaling a vehicle doesn’t make owners ineligible for restitution payment.
Update 12:57 AM Nov. 22: The updated Long Form notice found on VW’s court settlement site does include a timetable that agrees with the FTC order. It reads:
The following is the time table for the claims process and Volkswagen’s payment obligations.
Within 10 business days of your submission of a Claim, Volkswagen will notify you whether your Claim is complete. If it is deficient in any way, Volkswagen will describe the deficiency and provide instructions on how to cure it.
Within 10 business days of notification that an application is complete, Volkswagen will notify you whether you are eligible for the elected remedy and send you an offer.
While this shows that VW has communicated timing to customers, it does not address two primary concerns: First, that in many cases, 10 business days have passed and Volkswagen still hasn’t confirmed the documents as complete; and second, that owners had their documents marked complete in September, but they still have yet to receive their claim 10 days after November 1.
In other words, to customers, VW appears to be missing deadlines without communicating why.