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Toyota Ordered To Pay $21 Million Dollar Settlement For Over Charging Blacks & Asians

Japan-Toyota-LawsuitsToyota Credit, the financing division of the automotive company, will pay a settlement of $21.9 million to Black and Asian buyers who were charged more than white customers for their car loans.

The Los Angeles Times reported that Toyota Motor Credit Corp. faced investigation from the United States Department of Justice and the consumer Financial Protection Bureau since 2013; this as part of a wider inquiry into practices in the automotive lending industry.

The federal agencies found that the Toyota dealerships discriminated against over 100,000 Black and Asian car buyers over the past four years. Tacking on a race-based penalty that was above and beyond the base rate buyers were suppose to receive based on their credit score.

On average, Blacks paid 0.27 percentage points more than whites with similar credit records. Asians paid 0.18 percentage points more. This means Black borrowers paid as much as $200 more and Asians paid an average of $100 more than whites with the same credit profile. Although a dealership markup is not considered bad practice, it is a problem when the markups are based on race.

“No consumer should be forced to pay more money for a loan because of their race or national origin,” said U.S. Atty. Eileen M. Decker of the Central District of California regarding the settlement agreement.

Toyota Motor Credit made a statement saying the corporation “does not tolerate discrimination of any kind, even perceived or unintentional, from its employees or business partners. This practice extends to fair lending practices.”

In addition to the over $20 million Toyota was ordered to pay, the company will also allocate $2 million to compensate new customers until the issue is resolved. Toyota will also cap it’s dealer markup rates, which were as high as 2.5 percentage points, to 1.25 points, with 1 point for car notes over five years.

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Toyota is not the only corporation that has been charged with a discrimination suit.  In 2013, Ally Financial — formerly known as GMAC — was fined $18 million by the DOJ and CFPB and subsequently settled by agreeing to create an $80 million restitution fund, amid allegations of auto loan discrimination.

Just last year the Ohio-based Fifth Third Bank was ordered to pay $18 million in a settlement that charged the company with charging Black and Latino customers $200 or more for auto loans than whites. Auto dealers involved were allowed to keep the extra money earned from the interest as compensation.

Honda Financial — the financing division of Honda — also agreed to pay $24 million for it’s discriminatory practices last year.




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4 comments

Andre Williams February 4, 2016 at 10:35 pm

Goddamn man! We cant get a break no where!

Reply
Lorlean Battle February 4, 2016 at 11:39 pm

This is just absurd. So when I thought I was saving money by buying one of their Prius’ now I got to check to see if they over charged me based on my race. So ridiculous

Reply
Joseph Qawi February 6, 2016 at 8:01 pm

So now you Africans know what car manufacturer whose cars NOT to buy anymore!
But you all won’t listen; you all will still continue to spend your money with companies, corporations, etc., that do not give a DAMN about you as an African.

Reply
Manny Bruce February 7, 2016 at 6:37 am

Unfortunately this racist crap of over charging the black consumer have been going on in America for many years. This racist crap is even in the governments ( Federal and local ) distribution of money and services towards the communities of color. Black people are too damn liberal with their money and they need to be tight asses with their money. Black families and black churches used to teach and preach financial awareness as to where and to whom you spend your money , but no more. This unfair race base practices will continue because there are no real consequences for those who are caught. The money penalty amounts are nothing but pocket change to these businesses , and according to the article the car dealerships where allowed to keep their ill gotten profits. . A tap on their hands and being told not to do it again ( Really not to get caught ) , while getting the eye wink. The solution to this type of problem and for many others that black people endures is a simple one but everyone keeps avoiding to implement. The solution isn’t voting , nor marching , but what I’m talking about will give strength to the previous two. YouTube the entire MARTIN LUTHER KING’S , ” MOUNTAIN TOP SPEECH ” , to hear the solution . Once you hear his solution then you will know one of many reasons as to why he was assassinated the next day. MLK speech that day was given to him divinely and in it was given your weapon against these demons weaknesses . So , avoid the ” I HAVE A DREAM ” speech , because that’s where they want you at , ASLEEP. Instead listen to the entire MLK , ” MOUNTAIN TOP SPEECH ” , also , listen to his ” Poor People Speech ” , and his ” Vietnam War Speech ” . MLK was as powerful as MALCOM X.

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