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Hispanics drop local bias suit against Ford

November 24, 2010
An Illinois lawsuit alleging that Ford Motor Credit Co. discriminates against Hispanic car buyers has been dismissed, an attorney for the plaintiffs confirmed Aug. 15. A group of Hispanic car buyers in Illinois sued Ford's credit division, claiming the company's policies encourage Ford salespeople to increase the interest rates that Hispanic borrowers pay for car loans. Ford denied the allegations. The case was dropped in August at the request of the plaintiffs' attorneys after a federal judge in Chicago refused to grant the case class-action status. That would have allowed additional Hispanic buyers with similar allegations against Ford to join the suit. The additional plaintiffs would have greatly increased the potential monetary damages Ford could have faced. Ford Credit spokesman Dan Jarvis said the dismissal vindicates the company's claim that it did nothing wrong. "We knew from the beginning when the case was filed that it didn't represent the way we do business at Ford Credit. We do not and have not discriminated against our Hispanic customers or any other group." Washington, D.C., attorney Cyrus Mehri said he asked for the dismissal because it was in the plaintiffs' best interest. The lawsuit, and an analysis of Ford loan data by a statistician working for the plaintiffs, claimed the alleged discrimination caused Hispanics to pay roughly $266 more per loan than non- Hispanics with similar credit histories. The loan data was provided by Ford and covered the years 1997-2001. The lawsuit also claimed the alleged discrimination had no relation to the buyers' creditworthiness. Ford denied the allegations and claimed the statistical analysis was flawed. According to Ford, the interest rate a customer gets from a dealer depends largely on the buyer's negotiating skills and credit history. The 7,500 dealerships nationwide that do business with Ford Credit set their loan policies individually, Ford's attorneys said, and Ford Credit does not know the race or ethnicity of a borrower when it makes a loan. Jarvis also said the report was flawed because it only included data on roughly 6 million active or open loans. Data on more than 2.2 million loans that were paid off or closed were omitted from the report, thereby skewing the findings, Jarvis said. In addition, Jarvis said the study identified Hispanic customers strictly by their last names. This could exclude Hispanics with non-Hispanic names and include non-Hispanics with traditional Hispanic names.