Hyundai Motor America today announced that it has entered into an agreement with current and former owners and lessees of vehicles affected by the automaker’s November 2012 restatement of fuel economy ratings after being caught by the EPA for falsely inflating mileage claims. (Hyundai and Kia Caught in EPA Mileage Rating Fraud) The fraud produced mileage claims that could be as much as 6 mpg higher than EPA tests showed. About 900,000 vehicles are affected in the largest mileage fraud in history, including the best-selling Kia Optima and Hyundai Elantra sedans. Both makers heavily advertise and promote fuel economy as cornerstones of their brands, of course.
EPA’s audit testing occasionally uncovers individual vehicles whose label values are incorrect and requires the manufacturer re-label the vehicle. This has happened only twice since 2000. EPA said this is the first time where a large number of vehicles from the same manufacturer have deviated so significantly. 
In a statement Hyundai said that today’s settlement agreement is valued at up to approximately $210 million, with that number is dependent on how many customers elect to participate in the settlement’s one-time lump sum payment option or remain in the lifetime reimbursement program Hyundai introduced at the time of the mileage fraud announcement.
At the time of the mileage fraud in 2012, Hyundai provided a lifetime reimbursement program to cover the additional fuel costs associated with the rating change – plus a 15% premium in acknowledgment of the “inconvenience” to customers. Affected owners and lessees are compensated based on their actual mileage and the fuel costs for the region in which they live.
To address plaintiffs’ claims including the requirement to return to a dealership for mileage verification, which plaintiffs felt could deter participation in the reimbursement program, Hyundai agreed to add a lump sum payment option. The proposed cash lump sum amount, which varies by vehicle model and ownership type, will result in an average estimated payment of $353 to Hyundai owners and lessees.
The owner of a 2012 Elantra, for example, would receive a lump sum payment of $320 minus any previous reimbursement payments. Affected Hyundai owners may elect the one-time lump sum cash payment or remain in the automaker’s lifetime reimbursement program. Consumers can also elect other options, such as a dealership credit of 150% of the lump sum cash payment amount, or a credit of 200% of the cash amount toward the purchase of a new Hyundai vehicle.
The Court, on an extended taxpayer paid break no doubt, is expected to review the proposed settlement for preliminary approval in early 2014. Assuming preliminary approval is granted, notices will be sent to individual class members. Initial details of the settlement are available now at www.hyundaimpginfo.com. A website dedicated to the settlement will be established following preliminary approval by the Court about Hyundai and Kia Fuel Economy Litigation, MDL No. 2424. (Following disclosure of the fuel economy ratings discrepancy in November 2012, approximately 53 federal complaints were filed against Hyundai and Kia and later consolidated (In re: Hyundai and Kia Fuel Economy Litigation, MDL No. 2424) in United States District Court for the Central District of California before Judge George H. Wu.)
