Delaware to get $1.1 million from GM ignition switch settlement

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Image from GM media.

GM and 50 attorneys general, have settled allegations that the auto giant concealed safety issues related to ignition-switch-related defects in GM vehicles.

Delaware will receive $1.1 million in the settlement.

The settlement was reached between the attorneys general of 49 states and the District of Columbia, and GM ends 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 GM vehicles.

Estimates from 2015 put the death toll at more than 120.

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According to a release from the Delaware Attorney General’s office, in 2014, GM issued seven vehicle recalls in response to unintended key-rotation-related and/or ignition-switch-related issues, which have affected over nine million vehicles in the U.S.

The recalls involved a defective ignition switch that, 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 work.

The states alleged that certain employees of GM 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, GM personnel decided it wasn’t a safety concern and delayed making recalls, the suits allege.

Delaware and other states alleged that these actions were unfair and deceptive and that the automaker’s actions violated state consumer protection laws, including Delaware’s Consumer Fraud statute.

Under a Cease and Desist Order by Agreement, GM shall:

  • Not represent that a motor vehicle is “safe” unless they have complied with the Federal Motor Vehicle Safety standards applicable to the motor vehicle at issue.
  • Not represent that certified pre-owned vehicles that GM advertises are safe, have been repaired for safety issues, or have been subject to rigorous inspection, unless such vehicles are not subject to any open recalls relating to safety or have been repaired pursuant to such a recall.
  • Instruct its dealers that all applicable recall repairs must be completed before any GM motor vehicle sold in the U.S. and included in a recall is eligible for certification and, if there is a recall on any certified pre-owned vehicle sold in the U.S., the required repair must be completed before the vehicle is delivered to a customer.

Delaware will receive $1.12 million as part of the settlement with GM, which will go into the Consumer Protection Fund, which pays for the Attorney General’s work on consumer fraud and deceptive trade practice matters and other consumer-oriented investigations and legal actions. The total amount paid to the states as part of the settlement is $120 million.

Deputy Attorney General Stephen McDonald led Delaware’s work in this investigation.

Auto companies and suppliers have seen many similar actions involving states and the federal government over issues that have included the rollover potential of sport utility vehicles, gas tanks and most recently airbags.

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