Volkswagen Illustrates the Pointlessness of Cheating the Regulators and its Customers

The question of for Volkswagen during this crisis: Was it worth it?

So, Volkswagen admits that 11 million diesel vehicles worldwide are equipped with software that allows it to pass U.S. Environmental Protection Agency emissions tests, while otherwise spewing particulates that are 40 times the acceptable federal clean air standards.

The EPA has the authority to fine Volkswagen up to $18 billion. That’s over and above the $7.3 billion the company expects to spend to retrofit the vehicles with the proper software.

AT&T is being fined $100 million by the Federal Communications Commission for offering unlimited data plans that, in fact, had limits. AT&T is also facing a lawsuit from the Federal Trade Commission.

Earlier this year, PayPal was caught signing consumers up for an online credit product without their permission and hit with a $25-million-dollar fine from the Consumer Financial Protection Bureau

Companies lying to their customers is nothing new. In 1949, Camel cigarettes were doctor recommended.

And on a smaller scale, we’ve all tried on a dress that highlights the ten pounds that weren’t there last year only to hear the salesperson say, “Oh, that dress was made for you!” Maybe we’ve asked the wait staff if the happy hour special pomme-nanna-vodka-tini is worth a try and been told, “I think you’ll really like it.”

The bottom line in all these lies is clearly profits. But what happens to those profits when customers realize they’ve been played and next time go elsewhere? Or take their outrage to social media?  The Volkswagen USA Facebook page is filled with hundreds of negative posts calling for boycotts and public shaming. Seen on Twitter? #DasCheaters.  Isn’t all that more expensive than doing the right thing in the first place?

It’s not as if good behavior inhibits profits or goes unrewarded. Look at L.L. Bean. While that company’s core values were established more than 100 years ago, corporate social responsibility is becoming more important to customers.

There should be a lesson here. Even as some corporations view heavy fines and regulatory penalties as a cost of doing business, others are showing it’s possible to make a profit and do what’s right.

Just pray that Volkswagen never introduces a self-driving car.

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