Volkswagen allegedly sold pre-production model vehicles that did not meet U.S. safety standards as Certified Pre-Owned (CPO) to American consumers.

A proposed federal class-action lawsuit states Volkswagen Group of America, Inc., Audi of America, Inc. and their German parent companies defrauded and endangered consumers by " illegally titling, marketing and selling so-called certified pre-owned vehicles to unsuspecting customers who would have never otherwise purchased these cars or who would have paid less for such vehicles had the truth been known," according to attorney Michael J. Melkersen, whose offices filed the suit.

"Not only has Volkswagen knowingly sold cars in violation of applicable safety standards, Volkswagen tried to hide its misconduct by committing Federal Odometer Fraud by lying to consumers about when and how the mileage on these cars occurred," he said. "By providing a secret data feed to Carfax that manipulated how and when the mileage would appear in the Carfax vehicle history reports, Volkswagen and Audi were able to use Carfax to perpetrate this mileage-fraud scheme."

The models that did not comply with U.S. motor vehicle regulations are often built with non-standard parts or using assembly practices that may not meet U.S. safety standards. Pre-production vehicles can't be certified to comply with federal motor vehicle standards and are normally destroyed or exported.

The lawsuit alleges that in order to boost sales Volkswagen diverted the vehicles to its CPO program. Then, when it faced the likelihood of public scrutiny, Volkswagen engineered a "sneaky recall" that was delayed for two years until May 2018 and offered to buy back far fewer vehicles than the number allegedly sold illegally under the CPO program. 

In addition, Volkswagen allegedly intentionally misrepresented the certification, prior use and mileage of these vehicles to induce the fraudulent sale of these CPO cars, despite knowing that the cars could not legally be sold in the United States.

Court action further accuses Volkswagen of mislabeling pre-production cars as "CARFAX 1-Owner vehicles" that were actually "press vehicles" driven hard by automotive journalists and corporate pool-fleet cars driven by "a myriad of other individuals prior to being resold to consumers."

Concerned consumers who purchased a Volkswagen or Audi CPO vehicle between 2011 and present day should check their Carfax report. If the report shows the cars were originally titled in Michigan with 10 miles but were serviced on multiple dates before titling, or if there is more than a three-month gap between the date the vehicle was imported and the date it was first titled with only 10 miles, they are likely victims of the odometer fraud, Melkerson said.