A lawsuit has been filed against Hyundai Motor Co and its affiliate, Kia Motors Corp, that seeks $775 million in damages. The lawsuit is in response to automakers admitting that they overstated fuel economy on their vehicles. The carmakers, from South Korea, admitted on Friday that they overstated fuel efficiency on over one million vehicles sold recently in Canada and the United States. The company agreed to offer vehicle owners compensation for added fuel costs, according to Reuters.
The lawsuit was filed in United States District Court for Central California and is seeking class action status. It was filed on behalf of 23 Kia and Hyundai car owners. The suit also challenges the compensation plan outlined by the company. The plan states that owners will be issued a debit card that reimburses them for the difference in fuel economy. The company will also add 15 percent to the final amount to acknowledge the inconvenience caused.
Consumer Watchdog sued Hyundai Motor in July for misleading customers by saying that their 2011 and 2012 Hyundai Elantra was more fuel efficient than it actually was. It has been estimated by Moody’s Investors Service that the compensation plan for the automakers will cost $100 million per year until the vehicles are scrapped. The investing service did not estimate how much it will cost the automakers in legal costs.