By Juliana Barbassa
The Associated Press
SAN FRANCISCO - Three major finance companies were accused of unfairly charging blacks and Hispanics higher rates for car loans in lawsuits filed Thursday.
The suits were filed against Toyota Motor Credit, WFS Financial and American Honda Finance Corp., all based in California. The suits allege that car dealers arbitrarily charged blacks and Hispanics more for financing than they did white car buyers with similar credit ratings.
"These are secret markups inflicted in a discriminatory manner," said lawyer Bill Lann Lee, who represents several of the plaintiffs. "When a dealer sees a Hispanic or an African-American walking in, they see someone who is vulnerable."
The average markup for a white buyer is approximately $500, while it's about $1,000 for a minority customer, said Lee, former assistant attorney general for civil rights in the Clinton administration.
Car dealers keep most of the money from the markup, said Morris Baller, another attorney involved in the case. The suits, which seek class-action status, target the finance companies because they give the dealers an incentive to discriminate, he said.
A spokeswoman for WFS Financial would not comment on pending litigation. Messages left at the other companies were not returned.
Plaintiffs are seeking unspecified damages.
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