Arkansas to receive $1.4 million in General Motors settlement

Arkansas Attorney General Leslie Rutledge has reached a $120 million settlement, along with 48 other states and the District of Columbia, with General Motors Company over allegations that the company concealed safety issues related to ignition switch defects in GM vehicles. Arkansas will receive over $1.4 million.

The settlement concludes an 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 model years of GM vehicles.

Under the consent judgment, 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.

“GM’s failure to notify consumers of these ignition-switch issues is not only deceptive but dangerous,” said Attorney General Rutledge. “This inexcusable action placed the safety of Arkansans driving these flawed vehicles at risk as well as other drivers on the road. GM is being held accountable for these violations of many consumer protection laws.”

In 2014, GM issued seven vehicle recalls in response to unintended key-rotation-related and/or ignition-switch-related issues, which have affected over 9 million vehicles in the U.S. The recalls involved a defective ignition switch which, under certain conditions, could move out of the “run” position to the “accessory” or “off” position. Resulting in 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 deploy, increasing the risk of serious injury or death in certain types of crashes in which the airbag was otherwise designed to deploy.

Despite knowledge of the defect, GM personnel decided it was not a safety concern and delayed issuing recalls. GM continued to market the reliability and safety of its vehicles which were equipped with this defective ignition switch.

The states alleged that these actions were unfair and deceptive and that the automaker’s actions violated state consumer protection laws, including the Arkansas Deceptive Trade Practices Act.