Augusta Free Press

Herring reaches $120M settlement with General Motors over defective ignition switch

Attorney General Mark R. Herring announced today a $120 million settlement with General Motors over allegations the company concealed safety issues related to ignition-switch-related defects in General Motors vehicles.

The settlement, reached between the attorneys general of 49 states and the District of Columbia and General Motors Company, concludes a multistate investigation into the auto manufacturer’s failure to timely disclose known safety defects associated with unintended key-rotation-related and/or ignition-switch-related issues in several models and model years of General Motors vehicles.

“Keeping Virginians safe is my top priority as attorney general, and this settlement should send a strong signal to automobile manufacturers and businesses of all kinds that my office will not tolerate slow responses to safety hazards in consumer products, especially when a delay presents an unacceptable risk to the public,” said Attorney General Herring. “We remain vigilant and are putting companies on notice to do the right thing. As soon we discover a problem, my team and I will do what needs to be done to prevent further harm to Virginia consumers.”

In 2014, General Motors issued seven vehicle recalls in response to unintended key-rotation-related and/or ignition-switch-related issues, which have affected over 9 million vehicles in the U.S. The recalls involved a defective ignition switch which, under certain conditions, could move out of the “Run” position to the “Accessory” or “Off” position. If this occurs, the driver experiences a loss of electrical systems, including power steering and power brakes.  If a collision occurs while the ignition switch is in the “Accessory” or “Off” position, the vehicle’s safety airbags may also fail to deploy, increasing the risk of serious injury or death in certain types of crashes in which the airbag was otherwise designed to deploy.

As the states alleged, certain employees of General Motors and General Motors Corporation (which went through bankruptcy in 2009), knew as early as 2004 that the ignition switch posed a safety defect because it could cause airbag non-deployment. However, despite this knowledge, General Motors personnel decided it wasn’t a safety concern and delayed making recalls. General Motors continued to market the reliability and safety of its motor vehicles which were equipped with this defective ignition switch.

The states alleged that these actions were deceptive and that the automaker’s actions violated state consumer protection laws, including the Virginia Consumer Protection Act.

Under a Consent Judgment, which will be filed for approval in the Circuit Court of the City of Richmond, General Motors shall:

General Motors also agreed to pay the participating attorneys general a total of $120 Million, of which Virginia’s share is $2,396,147.70.

In addition to Virginia, the multistate group includes Alabama, Alaska, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin and Wyoming.

This matter was handled by Attorney General Herring’s Consumer Protection Section. In November, Attorney General Herring announced the completion of a reorganization of the OAG Consumer Protection Section to more efficiently and effectively enforce Virginia’s consumer protection laws, provide exceptional customer service in resolving complaints and disputes, and provide robust consumer education to keep Virginians from being victimized by fraud, scams, or illegal or abusive business practices. During Attorney General Herring’s administration the OAG Consumer Protection Section has recovered more than $224 million in relief for consumers and payments from violators.

If you have any consumer-related inquiries, the Office of the Attorney General’s Consumer Protection Hotline telephone counselors are available to assist you.  Please call the Consumer Protection Hotline at 1-800-552-9963 if calling from Virginia, or 804-786-2042 if calling from the Richmond area. You can also subscribe to the Consumer Protection Quarterly Newsletter here.