How Volkswagen Destroyed 70 Years of Trust in 70 Seconds (And Cost Themselves 3 Years of Profit)
September 18, 2015. The EPA issues a Notice of Violation to Volkswagen.
By September 23, VW's stock price had crashed 40%. The CEO resigned. Criminal investigations launched globally.
The crime? VW installed "defeat device" software in 11 million cars. It detected emissions tests and cheated. In test mode, emissions were clean. In real-world driving, emissions were 40x higher than legal limits.
The punishment? €31.3 billion ($34.7B) by 2020. Criminal indictments. Brand reputation destroyed.
This is the story of the biggest automotive fraud in history—and what it teaches about trust, compliance, and the cost of cutting corners.
The Setup: 'Clean Diesel' (2009-2015)
VW's Marketing Message: In the mid-2000s, Volkswagen faced a problem. US emissions standards were tightening. Diesel engines—popular in Europe for fuel efficiency—struggled to meet US NOx (nitrogen oxide) limits. VW's solution: "Clean diesel" technology. The promise:
What It IS
- → Low emissions (meets EPA standards)
- → High performance (better than gas)
- → Fuel efficiency (40+ MPG)
- → Environmentally friendly (lower CO2)
What It Is NOT
- It wasn't real. Not even close.
The engineering problem: Diesel engines produce high NOx emissions. To reduce NOx, you need: → Selective Catalytic Reduction (SCR) systems (expensive, reduces performance) → OR: Limit engine power (kills performance, defeats the "fun to drive" marketing) VW's engineers faced a choice: → Build expensive, low-performance diesels that meet standards → OR: Build cheap, high-performance diesels that don't They chose option 3: Cheat. The "defeat device": VW engineers wrote software that detected when a car was undergoing emissions testing. How it worked: The software monitored: → Steering wheel position (stationary during dyno tests) → Engine speed (constant during tests) → Throttle patterns (predictable in tests) When all three matched "test conditions": → Engine entered low-performance mode → Full emissions controls activated → NOx output reduced to legal levels → Test passed When driving normally: → Engine ran at full performance → Emissions controls minimized → NOx emissions 10-40x higher than legal limits → Drivers got the performance VW promised → Environment got poisoned How many cars? 11 million vehicles worldwide (2009-2015): → US: 500,000 vehicles → Europe: 8.5 million vehicles → Rest of world: 2 million vehicles Models affected: → VW Jetta, Passat, Golf, Beetle (diesel models) → Audi A3, Q5 (diesel models) Every single one had the cheat software.
The Discovery: How West Virginia Exposed VW (2014-2015)
A professional overseas invoice collection service does more than send reminder emails. Here's the real workflow:
Phase 1: Denial
"Our cars meet all regulations. Test methodology must be flawed."
Phase 2: Stalling
"We're investigating. May be a technical issue. We'll issue a recall."
Phase 3: Partial admission
December 2014: VW recalls 500,000 US vehicles for "software update."
Phase 4: The admission
September 3, 2015: EPA threatens to block 2016 VW diesel sales. September 18: VW admits "Defeat device exists. It was intentional."
The best agencies don't just chase—they diagnose why you're not getting paid first.
The Fallout: €31.3 Billion and Counting (2015-2020)
Stock Crash
43% in one week (€30 billion market cap loss)
US Criminal Fines
$4.3 billion (Largest in auto history)
Buyback Program
$7 billion (475,000 vehicles)
Profit Impact
Dieselgate cost VW nearly 3 years of total profit.
"The debtor is 'reviewing the invoice'… since last quarter."
— Every AR team, ever
Speed multiplier:
Cases with partial payment history + clean documentation resolve 3× faster on average.
Key Takeaways
Pattern 1: Exponential Fraud Scaling.
A small software tweak resulted in a -6,260% ROI through €31.3B in costs.
Pattern 2: Systematic Deception.
11 million vehicles were intentionally affected over 6 years.
Pattern 3: The Cover-up Penalty.
If VW had recalled early, they would have paid significantly smaller fines.
Pattern 4: The 70-Year Rule.
Trust takes decades to build but can be destroyed in 70 seconds.
Pattern 5: The ROI of Ethics.
VW lost €31.3 billion to save approximately €500 million in R&D.
Patterns are based on real recovery cases—individual outcomes vary based on evidence quality and debtor responsiveness.
Conclusion
Dieselgate is the cautionary tale for every business cutting corners.
VW's engineers faced a hard problem: Build diesel engines that were clean AND powerful. They couldn't. So they cheated.
The cheat saved maybe €500 million in R&D costs. It cost €31.3 billion when discovered.
But the real cost was trust. Seventy years of Volkswagen's reputation—German engineering, reliability, quality—destroyed in 70 seconds.
The lesson isn't just "don't cheat." It's: The cost of getting caught always exceeds the benefit of cheating.
VW gambled they wouldn't get caught. They lost.
The aftermath? €31.3 billion in fines. Criminal indictments. Brand damage. And a forced pivot to electric vehicles that VW is still executing today.
Trust isn't just good ethics. It's good business.
At Collecty, we believe trust is the foundation of B2B relationships. We recover debts ethically, transparently, and with respect for all parties. No shortcuts. No tricks. Just results.
Sarah Lindberg
International Operations Lead
Sarah coordinates our global partner network across 160+ countries, ensuring seamless cross-border debt recovery.
