Toyota Settlement Pays $1.2 Billion to the U.S.


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The U.S. Department of Justice today announced that Toyota Motor Corporation has agreed to pay $1.2 billion to the U.S. to settle a criminal wire fraud charge. It is the largest financial penalty of this kind imposed by the U.S. on a vehicle manufacturer.

The settlement surrounds the well-publicized recall of Toyota and Lexus vehicles over manufacturing errors that could cause "unintended acceleration."

The Justice Department's case against Toyota claimed that Toyota knowingly defrauded consumers in late 2009 and early 2010 through "misleading statements" touting the safety of its vehicles. As part of the settlement Toyota is now admitting that U.S. consumers were mislead by statements about the acceleration issue.

The agreement also puts in place an independent monitor to review Toyota's safety-related public relations, statements, and reporting. Toyota's compliance is required for three years for the Justice Department to dismiss the wire fraud charge.

“Rather than promptly disclosing and correcting safety issues about which they were aware, Toyota made misleading public statements to consumers and gave inaccurate facts to Members of Congress,” said Eric Holder, U.S. Attorney General. “When car owners get behind the wheel, they have a right to expect that their vehicle is safe. If any part of the automobile turns out to have safety issues, the car company has a duty to be upfront about them, to fix them quickly, and to immediately tell the truth about the problem and its scope. Toyota violated that basic compact. Other car companies should not repeat Toyota’s mistake: a recall may damage a company’s reputation, but deceiving your customers makes that damage far more lasting."

Toyota is quickly becoming infamous for its numerous safety recalls. Just last year the company's Sienna minivans were recalled over an issue that could cause the vehicles to shift out of park without the brake engaged. Most recently the company recalled nearly 1.9 million of its Prius hybrids due to a software glitch that could cause the vehicles to lose power during a drive.

Image via Wikimedia Commons