Ford To Pay $19.2M In Multi-State Settlement For False Advertising Claims

On Tuesday, the Iowa Attorney General's Office stated that Ford Motor Company F would pay $19.2 million to resolve allegations that it falsely represented real-world fuel economy and payload capacity for various hybrids and pickup trucks, reported Reuters.

The multi-state settlement applies to 2013–2014 C-Max hybrids and 2011–2014 Super Duty pickups.

In 2013, Ford lowered the advertised fuel economy ratings on its C-Max hybrid by up to seven miles per gallon and sent checks to owners of $550 to make up the difference in fuel costs.

What happened: According to Acting New Jersey Attorney General Matthew Platkin, Ford misrepresented the distance consumers could drive on one tank of gas, claimed driving style had no effect on vehicles' real-world fuel economy, and claimed higher real-world fuel economy compared to competing hybrids.

Due to inaccurate payload values, Ford recalled almost 12,000 2020 F-350 trucks in 2021. According to a study, they may have been overestimated by 78 to 900 lbs.

Why It's Important: The settlement, reached with 40 states and the District of Columbia, prohibits Ford from making false or misleading advertising claims about a new vehicle's estimated fuel economy or payload capacity. Ford denied any wrongdoing.

Ford said it was pleased the issue was "closed without any judicial finding of improper conduct. We worked with the states to resolve their concerns and in the process limited additional investigative costs and legal expenses for all parties."

Price Action: F shares are trading higher by 0.16% at $12.44 during the pre-market session on Wednesday.

Photo via Wikimedia Commons