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Webster Announces Terms of Chrysler Settlement

August 24, 1988

JEFFERSON CITY, Mo. (AP) _ More than 39,000 consumers who own Chrysler Motors Corp. cars that were test-driven with disconnected odometers will receive at least $500 in restitution, under a nationwide settlement detailed Tuesday.

Missouri Attorney General William Webster, who served as the lead negotiator in the $16 million-plus settlement with the automaker earlier this year, briefed reporters on the details at a news conference.

He said attorneys general from nine other states assisted in the settlement proceeding filed Aug. 19 in U.S. District Court in St. Louis.

The action was taken on behalf of consumers in 46 states and Guam and Puerto Rico. The states that did not participate in the settlement are Georgia, Kentucky, Nevada and South Carolina, Webster said.

Chrysler agreed last year to pay about $16 million to settle the matter, but approval of a settlement was delayed by lawsuits filed against it by consumers and authorities around the country.

Chrysler pleaded no contest last year to federal charges of odometer tampering. Chrysler stopped disconnecting odometers in October 1986, after learning of the government investigation.

Webster said his office, as well as officials in certain other states, were mailing letters to consumers who own cars test driven in the company’s ″Overnight Evaluation Program.″

In the program, which took place for years, new cars were driven by company executives as part of the testing process before the vehicles were shipped to dealers. Odometers on those cars were disconnected while the executives drove them, leading buyers to believe they had bought new cars.

The letters tell consumers what steps they must take to determine if they are eligible for a minimum of $500 in restitution from the company and outlines procedures they must follow.

Chrysler also will run advertisements in the country’s 20 largest newspapers on Friday about the settlement, Webster said.

The settlement affects consumers who purchased a car made by Chrysler before Oct. 9, 1986. Consumers must have owned that car on July 31, 1987, to participate in the settlement.

Only consumers who purchased cars test driven with a disconnected odometer in the company’s Overnight Evaluation Program will be affected, Webster said.

U.S. District Court Judge John F. Nangle will hold a fairness hearing regarding the settlement Oct. 11 in St. Louis, Webster said.

Consumers who have objections about the settlement must file complaints with the court by Sept. 30.

After the hearing, consumers will have 90 days to submit to the federal court a ″Proof of Claim and Release Form″ regarding the settlemnt. Consumers who do not file such a claim forfeit all rights to participate in Chrysler’s settlement, the attorney general said.

Chrysler has announced it would increase warranty coverage for cars on which odometers had been disconnected. A handful of the cars were involved in accidents and consumers that purchased those cars will receive new automobiles, Webster said.

Webster said mileage on affected cars probably ranged from 40 miles to 200 or 300 miles.

″When you put it in that context and consumers are getting $1 to $10 for every mile driven, plus a brand new warranty, we think it’s a good settlement,″ Webster said.

Webster said Chrysler will be forced to pay at least $16 million in restitution regardless of how many of the 39,500 consumers take part in the program. So if only half of the consumers file claims, they would receive $1,000, Webster said.

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