The finance arm of Ford Motor Co. has agreed to pay restitution to about 150,000 consumers who were overcharged in the 1990s when they terminated their vehicle leases early to buy leased cars, authorities reportedly said on Thursday.
In addition to Ford Motor Credit, the settlement with 38 US states involves over 1,300 Ford and Lincoln Mercury dealers who will jointly pay more than $US6.2 million in legal fees and costs, state attorneys-general said, according to Reuters.
According to the news agency, the settlement involves Ford Motor Credit’s ‘Red Carpet’ leasing programme which came under scrutiny when investigators found that early termination of vehicle leases resulted in unauthorised charges to customers that were sometimes higher than the actual balance owed on the lease.
Consumers eligible for restitution – those who terminated their leases early between 1991 and 1999 to purchase leased cars and who did not receive a pay-off quote directly from Ford Motor Credit – may qualify for $100 refunds under terms of the settlement, Reuters said.
A statement from Michigan attorney general Mike Cox reportedly said that as part of the settlement Ford had agreed to change the language of its vehicle lease contracts, to clearly explain a consumer’s rights when terminating a lease early.