kent
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Post by kent on Jul 14, 2015 16:44:48 GMT -5
www.msn.com/en-us/money/companies/honda-to-pay-dollar25m-for-overcharging-minority-buyers-on-loans/ar-AAcYdis
Japanese automaker Honda has agreed to pay $25 million to settle US claims that it discriminated against minority buyers by overcharging them for auto loans, US authorities announced Tuesday.
American Honda Finance Corporation, a unit of Honda based in California, generally discriminated against African-American, Hispanic and Asian borrowers in lending, said the US Justice Department and the Consumer Financial Protection Bureau.
American Honda Finance offers financing to car buyers through auto dealers.
The government alleged that minority borrowers were charged higher interest rates "because of their race or national origin and not because of the borrowers' creditworthiness or other objective criteria related to borrower risk."
For instance, they said, the average African-American borrower paid over $250 more during the loan term because of discrimination, while for Hispanics it was over $200 and for Asians over $150.
Under the settlement agreement, Honda will pay $24 million in compensation for alleged victims and $1 million to fund a consumer financial education program for minorities.
Honda also has agreed to significantly limit the markup in interest rates the dealers can charge, they said.
"We commend Honda for its leadership in agreeing to impose lower caps on discretionary markups and for its commitment to treating all of its customers fairly without regard to race or national origin," said Vanita Gupta, head of the Justice Department's Civil Rights Division, in the statement.
"We hope that Honda's leadership will spur the rest of the industry to constrain dealer markup to address discriminatory pricing."
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Value Buy
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Post by Value Buy on Jul 14, 2015 18:27:16 GMT -5
Wow, a Japanese company ripping off their own people!
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Deleted
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Post by Deleted on Jul 14, 2015 18:56:48 GMT -5
American Honda financed the car I have now. My interest rate was 2.9%. I remember exactly what it was because I thought it was good.
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billisonboard
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Post by billisonboard on Jul 14, 2015 19:09:12 GMT -5
Wow, a Japanese company ripping off their own people! Wait? They ripped off Japanese people?
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Post by Deleted on Jul 14, 2015 20:19:22 GMT -5
Wow, a Japanese company ripping off their own people! Wait? They ripped off Japanese people? Japanese are Asians so it's possible.
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bean29
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Post by bean29 on Jul 14, 2015 20:41:05 GMT -5
I am driving a 2012 Honda CRV. .9 % financing for 5 years. Joint titled with DH. If they offer a trade in special I will go with it, I think my transmission is going and I have about 50,000 miles on it.
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Jul 14, 2015 20:48:25 GMT -5
White male privilege, bitches: I paid .9% on the Civic. But seriously, this whole thing is probably bullshit. I'd like to see evidence of the apples-to-apples comparisons- same credit score, same level of education, and a different interest rate. My guess is that an analysis of good data will show that other factors account for the difference- namely the credit scores and car-buying savvy of the individuals concerned. But then, I suppose the credit scoring companies are racist, too. All this bitching and moaning about woe is me because of racism gets damn old.
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Value Buy
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Post by Value Buy on Jul 14, 2015 21:16:21 GMT -5
Wow, a Japanese company ripping off their own people! Wait? They ripped off Japanese people? They evidently discriminated against their entire race which includes their own people. The government said they discriminated against Asians. They did not exempt "Japanese Americans' in the description, but since they are all of Asian descent, it's their own people.
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Opti
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Post by Opti on Jul 14, 2015 22:43:35 GMT -5
White male privilege, bitches: I paid .9% on the Civic. But seriously, this whole thing is probably bullshit. I'd like to see evidence of the apples-to-apples comparisons- same credit score, same level of education, and a different interest rate. My guess is that an analysis of good data will show that other factors account for the difference- namely the credit scores and car-buying savvy of the individuals concerned. But then, I suppose the credit scoring companies are racist, too. All this bitching and moaning about woe is me because of racism gets damn old. Its called data mining bitches, and I know you are wrong. Ask yourself honestly, try for a min perhaps, how they came up with different dollar amounts aggregated to race.
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Opti
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Post by Opti on Jul 14, 2015 22:46:15 GMT -5
Who has a clue how the credit industry really works? *** Raises hand ***
It isn't the unicorn farts and living within your means that makes the $$ worldwide. Its picking how to make the money, how to tier the interest, how to advertise the products, who will pay more for less, yada yada.
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Opti
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Post by Opti on Jul 14, 2015 22:49:36 GMT -5
Wait? They ripped off Japanese people? They evidently discriminated against their entire race which includes their own people. The government said they discriminated against Asians. They did not exempt "Japanese Americans' in the description, but since they are all of Asian descent, it's their own people. Asians is a big swath, so it would be nice to see how it is defined in the court documents. Does it include Pacific Islanders or exclude them? Did Koreans and Chinese get charged more than people from Japan, Hawaii or the Phillipines? And did anyone in Singapore, even buy a Honda?
More Qs than answers to me.
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Tennesseer
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Post by Tennesseer on Jul 14, 2015 23:00:38 GMT -5
White male privilege, bitches: I paid .9% on the Civic. But seriously, this whole thing is probably bullshit. I'd like to see evidence of the apples-to-apples comparisons- same credit score, same level of education, and a different interest rate. My guess is that an analysis of good data will show that other factors account for the difference- namely the credit scores and car-buying savvy of the individuals concerned. But then, I suppose the credit scoring companies are racist, too. All this bitching and moaning about woe is me because of racism gets damn old. From today's announcement by the United States Department of Justice: Justice Department and Consumer Financial Protection Bureau Reach Groundbreaking Settlement to Resolve Allegations of Auto Lending Discrimination by Honda
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Jul 14, 2015 23:02:21 GMT -5
White male privilege, bitches: I paid .9% on the Civic. But seriously, this whole thing is probably bullshit. I'd like to see evidence of the apples-to-apples comparisons- same credit score, same level of education, and a different interest rate. My guess is that an analysis of good data will show that other factors account for the difference- namely the credit scores and car-buying savvy of the individuals concerned. But then, I suppose the credit scoring companies are racist, too. All this bitching and moaning about woe is me because of racism gets damn old. Its called data mining bitches, and I know you are wrong. Ask yourself honestly, try for a min perhaps, how they came up with different dollar amounts aggregated to race.
Oh, I have no doubt they found a correlation between minorities and higher interest rates. The question is: why? And the answer is: probably not race.
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Jul 14, 2015 23:07:56 GMT -5
I'd like to see the data that shows a significant disparity between minority buyers with the same exact credit score ended up paying a higher rate. Settling just means Honda doesn't want to waste time and money fighting it.
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Opti
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Post by Opti on Jul 15, 2015 3:17:41 GMT -5
Its called data mining bitches, and I know you are wrong. Ask yourself honestly, try for a min perhaps, how they came up with different dollar amounts aggregated to race.
Oh, I have no doubt they found a correlation between minorities and higher interest rates. The question is: why? And the answer is: probably not race. You be missing the point. Probably because you believe certain things about money you are missing it on that end, and I am positive you do not understand the IT end of it like I do. I've been a recipient of that data mining and so have many people shopping retail.
I don't know if you remember stories about girls being outed as being pregnant based on their purchases to their parents, but data mining and prediction is most definitely a work in progress. That article(old thread) at least explained why every once in awhile I'd be getting coupons for baby crap when I had no kids and was not pregnant. But when my lizards are sick, I often start buying baby food to feed them, to get them back to normal. Targeting me in that instance, is a prediction fail, but they may or may not know that. Unexplained baby food purchases -> must be pregnant -> offer baby food & baby product coupons
Buying custom wheels is on the data mining list and other behaviors that are more embraced by certain cultures/races. The lawsuit exists because some people believed that kind of data mining was not really predictive, i.e. accurate, just easy and close enough for corporate work.
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Post by Deleted on Jul 15, 2015 5:47:05 GMT -5
I am driving a 2012 Honda CRV. .9 % financing for 5 years. Joint titled with DH. If they offer a trade in special I will go with it, I think my transmission is going and I have about 50,000 miles on it. I had a 99 Honda Accord that I bought new and had transmission problems before it was out of warranty. And twice more after it was out of warranty. They replaced the transmission the last 2 times. The last one, I had 75k miles on the car. They never actually recalled the transmissions for that model year, but my service advisor told me they'd been having a lot of problems with the transmissions. I guess that's why they took care of mine even after it was out of warranty. That, and I was persistant with the first replacement. I traded it in for a new 2003. It's had transmission recalls. Has there been a recall on your car?
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OldCoyote
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Post by OldCoyote on Jul 15, 2015 9:18:28 GMT -5
Where did they get their data? It has been years since I filled out a credit form, I don't recall it asking if I was white so I could get a discount.
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OldCoyote
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Post by OldCoyote on Jul 15, 2015 9:20:58 GMT -5
On second thought, do the credit companies keep track of that info?
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Opti
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Post by Opti on Jul 15, 2015 9:24:51 GMT -5
On second thought, do the credit companies keep track of that info? Yes. Do you think perhaps, just maybe, car companies look at people's DL's before they buy a car? (Optimist plays Virgil.)
Name all the information on a Driver's license that can be data-mined. Go.
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OldCoyote
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Post by OldCoyote on Jul 15, 2015 9:40:32 GMT -5
Would this be determined by the finance manager in the store or would the Corp. people make that decision,
I would bet that the finance manager makes that decision, the higher the rate he can get the bigger commission he receives.
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Tennesseer
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Post by Tennesseer on Jul 15, 2015 9:58:44 GMT -5
Would this be determined by the finance manager in the store or would the Corp. people make that decision, I would bet that the finance manager makes that decision, the higher the rate he can get the bigger commission he receives. From the Department of Justice link I posted in reply #11: "Honda is known as an “indirect” auto lender because, rather than taking applications directly from consumers, the company makes most of its loans through car dealers nationwide who help their customers pay for their new or used car by submitting their loan application to Honda. Honda’s business practice, like most other major auto lenders, allows car dealers discretion to vary a loan’s interest rate from the price Honda initially sets based on the borrower’s objective credit-related factors. Dealers receive greater payments from Honda on loans that include a higher interest rate markup."
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Deleted
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Post by Deleted on Jul 15, 2015 13:13:35 GMT -5
Don't the signatories to these auto loans agree to the rates ?
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bean29
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Post by bean29 on Jul 15, 2015 14:40:55 GMT -5
I am driving a 2012 Honda CRV. .9 % financing for 5 years. Joint titled with DH. If they offer a trade in special I will go with it, I think my transmission is going and I have about 50,000 miles on it. I had a 99 Honda Accord that I bought new and had transmission problems before it was out of warranty. And twice more after it was out of warranty. They replaced the transmission the last 2 times. The last one, I had 75k miles on the car. They never actually recalled the transmissions for that model year, but my service advisor told me they'd been having a lot of problems with the transmissions. I guess that's why they took care of mine even after it was out of warranty. That, and I was persistant with the first replacement. I traded it in for a new 2003. It's had transmission recalls. Has there been a recall on your car? Not to my knowledge and it is out of warranty so I should probably it. Sigh...bye bye .9 financing and I will have 2 in college in fall and DH and I just bought new furniture and he put in a new patio. GRR. 10 20 years of conservative living and spending down the drain. Should have bought a Hyundai like DD and DH.
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bean29
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Post by bean29 on Jul 15, 2015 14:44:16 GMT -5
Oh, I meant to mention that the financing is only a small part of where dealers make their money. We know lots of people that paid more or nearly more for used than we paid for new cars (same or similar models). The ones that have higher interest rates, probably also failed to negotiate a good price on the car.
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happyhoix
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Post by happyhoix on Jul 15, 2015 14:53:29 GMT -5
Oh, I meant to mention that the financing is only a small part of where dealers make their money. We know lots of people that paid more or nearly more for used than we paid for new cars (same or similar models). The ones that have higher interest rates, probably also failed to negotiate a good price on the car. It looks like they were only charged with overcharging on the interest rate?
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bean29
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Post by bean29 on Jul 15, 2015 15:00:30 GMT -5
Oh, I meant to mention that the financing is only a small part of where dealers make their money. We know lots of people that paid more or nearly more for used than we paid for new cars (same or similar models). The ones that have higher interest rates, probably also failed to negotiate a good price on the car. It looks like they were only charged with overcharging on the interest rate? Well, I don't know how they would determine how discrimination occurred in a negotiated deal, but they do it in housing, so I guess it would be possible. But, the interest is similar to the price in that if you shop lenders, you can walk you financing away from the dealer to your bank or credit union...so I guess I have to say...Paul kinda has a point.
I absolutely think Optimist has a point though too. Test drive a car off the lot, they have to have your DL and I am pretty sure they either copy it or type the numbers into their computer. If you actually apply for credit, they would ask for ID to verify you are the person that the credit ap says you are.
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happyhoix
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Post by happyhoix on Jul 15, 2015 15:01:26 GMT -5
Don't the signatories to these auto loans agree to the rates ? Yes, but when you sign that you accept 1.5% interest, do you know that Jim got 1.6 and John got 1.4? Usually the ads state "XX interest rate to qualified buyers" and when you get there, they tell you if you qualify for the best rate or not. So if only the people with excellent credit get the 1% interest rate, and you qualify for the 1.4% interest rate (according to them), how do you determine if that's better or worse than what the other guys get? I'd like to see this data broken down by male/female buyers. I always feel like car dealerships should send me flowers when I buy a car, cause I got screwed for not having a penis. This stems from a car shopping trip when the sales guy spent the whole visit talking to DH about the technical details of the car, then turned to me and asked me what color I liked 'because the ladies are the ones who are concerned about the car color.' Yes, I only care if the car is pretty. Then there was that other car buying trip where I test drove the car, which was a stick shift, and the dealer said "You shift pretty good, for a woman." Seriously, you don't need a penis to use a stick shift!
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kittensaver
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Post by kittensaver on Jul 15, 2015 15:08:44 GMT -5
White male privilege, bitches: I paid .9% on the Civic. But seriously, this whole thing is probably bullshit. I'd like to see evidence of the apples-to-apples comparisons- same credit score, same level of education, and a different interest rate. My guess is that an analysis of good data will show that other factors account for the difference- namely the credit scores and car-buying savvy of the individuals concerned. But then, I suppose the credit scoring companies are racist, too. All this bitching and moaning about woe is me because of racism gets damn old. I assume you're smart enough to understand the subtleties between "discrimination" and "disparate impact."
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Deleted
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Post by Deleted on Jul 15, 2015 16:41:31 GMT -5
Why didn't Honda charge the higher interest rate to everyone? It would have been more money to them.
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Post by Deleted on Jul 15, 2015 16:42:03 GMT -5
I had a 99 Honda Accord that I bought new and had transmission problems before it was out of warranty. And twice more after it was out of warranty. They replaced the transmission the last 2 times. The last one, I had 75k miles on the car. They never actually recalled the transmissions for that model year, but my service advisor told me they'd been having a lot of problems with the transmissions. I guess that's why they took care of mine even after it was out of warranty. That, and I was persistant with the first replacement. I traded it in for a new 2003. It's had transmission recalls. Has there been a recall on your car? Not to my knowledge and it is out of warranty so I should probably it. Sigh...bye bye .9 financing and I will have 2 in college in fall and DH and I just bought new furniture and he put in a new patio. GRR. 10 20 years of conservative living and spending down the drain. Should have bought a Hyundai like DD and DH. That sucks. Except for several recalls that just cost me some time at my convenience, my car has lived up to the good reputation that Hondas have. I'll shut up about my car now, I'm always afraid I'll jinx myself when I talk about how it's been a great little car for so long.
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