Ford, Lincoln Mercury Dealers to Pay Fines for Deceptive Leasing Practices

More than 200 Ford and Lincoln Mercury dealers in California agreed to pay fines totaling $822,500 for alleged deceptive leasing practices in a civil judgment obtained Thursday by three California district attorneys offices.

The financing arm of Ford Motor Co., the world’s No. 2 auto maker, was also named in the judgment as allegedly playing a minor role in the deceptive practices. Ford Motor Credit Co. agreed to pay $111,921 in investigative costs, as well as restitution fees to consumers.

The judgment, filed in Alameda County Superior Court, charged that between 1992 and 1995, 204 of the state’s 275 Ford and Lincoln Mercury dealers added undisclosed and improper charges on top of a routine $200 fee when consumers elected to terminate their “Ford Red Carpet” lease agreements early.

The district attorneys in Los Angeles, Alameda and Sacramento counties obtained the judgment after a lengthy investigation.

By agreeing to the settlement, the parties involved avoided court proceedings. Such an agreement, common in civil cases, includes no admission of wrongdoing.

As many as 36,000 California consumers will be entitled to receive $100 in restitution from Ford Motor Credit as part of the settlement, according to a statement issued by Los Angeles County Dist. Atty. Gil Garcetti. Thirty-nine of the 204 dealers involved are in the county.

Affected customers will receive notices and claim forms in the next 60 days, said Thomas A. Papageorge, head of the consumer protection division at the Los Angeles district attorney’s office.

Papageorge said consumers were forced to take the word of dealers when they sought to terminate lease agreements because the contracts “were very complex and almost impossible for a consumer to understand.”