Federal judge rules Ford Motor Credit affiliate charged blacks higher rates

Wednesday, March 16th 2005, 2:48 pm
By: News On 6

NASHVILLE, Tenn. (AP) _ A federal judge ruled Wednesday that a lending affiliate of the Ford Motor Co. discriminated against thousands of black customers by charging them higher rates on car loans.

U.S. District Judge Aleta Trauger ruled against Primus Automotive Financial Services, a unit of the Ford Motor Credit Corp., following a two-week trial of a class-action lawsuit.

The lawsuit lists 11 named plaintiffs, but attorneys said thousands of black customers were discriminated against and are included in the class. Attorneys said they were unfairly charged hundreds of thousands of dollars more than they should have been on car loans.

The plaintiffs sought an end to discriminatory practices rather than damages, but Primus must pay attorney fees.

Trauger ordered both sides to negotiate for 30 days to agree on a remedy to end the discrimination. She said they could still agree to settle the case.

Lawsuits for Primus and the plaintiffs did not immediately comment on the ruling.

Ford Motor Credit also offers car loans under several other brands, including Jaguar Credit, Volvo Car Finance, Mazda American Credit and Land Rover Capital Group.

Several lawsuits alleging discrimination against blacks have been filed against financing companies for various automakers nationwide since 1998, resulting in five out-of-court settlements. The class-action suit against Primus was the first to go to trial.

The settlements in the other cases have included company agreements to place caps on the interest rate markups that dealers can make on loans. In marking up a loan, dealers add percentage points of interest to a loan and get to keep most of the extra money.