Saturday, February 13, 2016
This Major Auto Company Ripped Off Thousands of Low Income Blacks and Others
In an unbelievable legal case involving the Toyota Motor Credit Corporation, a government investigation of the company revealed that Toyota had charged minority customers higher interest rates on their auto purchases from 2011 to 2016. The company will end up paying $21.9 million in restitution to affected customers.
Thousands of minorities affected
Although Toyota has agreed to pay $21.9 million in restitution, it can't excuse the blatant discrimination exercised against black, Pacific Islander, and Asian borrowers. Customers of color paid Toyota between $100 and $200 more in interest rates than white customers with similar credit. Toyota called it "dealer markup," but it was clearly more money charged unequally to minorities.
The investigation was conducted by the U.S. Consumer Financial Protection Bureau and the Department of Justice. It revealed that minorities, particularly blacks, Asians, and Pacific Islanders, paid higher interest rates, regardless of their credit rating.
How dealers discriminated
The Toyota Motor Credit Corporation stated that it “does not tolerate discrimination of any kind, even perceived or unintentional.” So, how did the discrimination occur? Apparently, individual Toyota dealers were allowed to vary their pricing on their in-house financing. Many dealers increased their rates up to 2.5 percent to minorities, which adds up over the life of the loan.
In addition to compensation to customers, Toyota has also agreed to cap percentage rates on five-year loans in an effort to prevent any more discriminatory practices.
Read more at www.theatlantic.com/business/archive/2016/02/toyota-car-loans-restitution/459678/