Lawsuit Alleges Ford Motor Credit Charges Blacks More to Finance Cars

A group of African Americans sued Ford Motor Credit Co. on Wednesday, alleging that the company discriminates against blacks by charging them higher financing rates.

The suit, which seeks class-action status, requests unspecified restitution and an injunction forcing Ford Motor Credit to change its policy. The plaintiffs want the suit to represent all African Americans who obtained financing from Ford Motor Credit beginning in 1990. The case was filed in federal court in Manhattan.

Ford Motor Credit, a unit of Ford Motor Co., is the world’s largest automotive finance company. It provides vehicle financing through a network of about 11,000 Ford, Lincoln-Mercury and other dealers.

At issue in the suit is what the plaintiffs allege are unchecked, subjective “mark-up” hikes arranged by dealers. These mark-ups are allegedly added to the risk-based rates computed by Ford Motor Credit. The suit alleges that Ford Motor Credit and the dealers share in the additional profit resulting from the mark-ups.

“We absolutely do not discriminate in any way,” said Dan Jarvis, a Ford Motor Credit spokesman. He said finance rates are based on the level of risk and credit scores. He said Ford Motor Credit does not know an applicant’s race.

“It [rate] has nothing to do with gender, age or racial makeup. We just don’t operate that way,” he said.

The suit against Ford Motor Credit follows last week’s unsealing of two similar cases filed two years ago against General Motors Acceptance Corp. and Nissan Motors Acceptance Corp.. Those cases, which were certified this past August as class actions, were filed in federal court in Nashville.