Oregon Department of Justice

Attorney General Ellen F. Rosenblum

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AG Myers Reaches Settlement With Ford Motor Credit And 34 Oregon Dealerships

June 10, 2004

Attorney General Hardy Myers today announced an agreement with Ford Motor Credit Company and 34 Oregon Ford and Lincoln Mercury dealers as part of a multi-state settlement involving the companies' leasing practices. Named in a complaint and a stipulated general consent judgment filed today in Marion County Circuit Court are Ford Motor Credit Company of Dearborn, Michigan and the 34 local dealers. The order admits no law violation.

The agreement involves Oregon, Attorneys General from 37 other states, Ford Motor Credit and 1,300 participating Ford and Lincoln Mercury dealers. Ford Credit will pay $500,000 in fees and costs in addition to all consumer restitution and administration of the settlement. The automobile dealers will pay $5.8 million to participate in the settlement.

The Oregon Department of Justice will receive payments for the consumer education and protection fund totaling $124,000 from participating Oregon dealers and more than $12,000 from Ford Motor Credit.

"Ford Motor Credit took advantage of the confusion that often comes with leasing and later purchasing automobiles," Myers said. "In addition, consumers were not allowed to obtain payoff amounts on leased vehicles directly from Ford Motor Credit. They were required to renegotiate the termination costs with the original dealer, resulting in thousands of consumers paying more than what was owed."

While investigating the Ford Motor Credit's "red carpet" leasing program, government investigators discovered that consumers terminating a vehicle lease early for purposes of purchasing or trading-in an automobile often found themselves paying more than what was actually owed on the lease.

States' inquiries found that dealers would discharge the lease obligation to Ford Credit, but would keep the extra amount charged to consumers, who were usually unaware of any of this because the dealers provide the payoff figure, not Ford Credit. As part of the agreement, Ford has changed its leasing language to include a clear explanation of a consumer's rights when terminating a vehicle lease early. Not only have Ford Credit branches made those changes but so have the dealerships.

Oregonians who leased cars through Ford Motor Credit from 1991 through 1994 may qualify for a $100 in restitution. Victims will be directly notified by the company of their eligibility. Other consumers also may participate by calling the administrator of the settlement at 1-800-221-3312 or online at www.gilardi.com/fordcreditrclagsettlement.

The following 34 Oregon Ford and Lincoln Mercury dealers were named in the agreement:

  • Astoria Ford, Astoria
  • Butler Ford, Ashland
  • C. Wilson (dba Wilson Motors), Corvallis
  • Crater Lake Motors, Medford
  • Doherty Ford , Forest Grove
  • Friendship Ford, Lebanon
  • Gary-Worth Lincoln-Mercury, Gladstone
  • Gibson Motor, Junction City
  • Gilbert Tilbury Company(dba Chuck Colvin Auto Center), McMinnville
  • Gresham Ford, Gresham
  • Hillyers Mid-City Ford, Woodburn
  • Hood River Ford-Mercury, Hood River
  • Johnston Motor, Florence
  • Kendall Automotive Group, Eugene
  • Landmark Ford, Tigard
  • Lithia FTC Inc.
  • Lithia Rose-Ft Inc, Roseburg
  • MacKenzie Motor (dba Dick's MacKenzie Ford), Hillsboro
  • Midway Motors (dba Power Ford Lincoln Mercury), Newport
  • Mock Ford, Grants Pass
  • Pendleton Ford, Pendleton
  • Ray Schultens Motors, The Dalles
  • RMZ Inc. (Beaverton Lincoln Mercury), Beaverton
  • Robberson Ford Sales, Bend
  • Ron Tonkin Lincoln-Mercury, Portland
  • Skyline Sales, Salem
  • South Coast Holdings (dba Brookings-Harbor Ford), Brookings
  • St. Helens Auto Center, St. Helens
  • Stayton Motors, Aumsville
  • Suburban Ford, Sandy
  • Tillamook Motor Company, Tillamook
  • Tower Motor, Coos Bay
  • Town & Country Ford, Portland
  • Wrayco Inc. (dba Harvest Ford), Klamath Falls

Penalties paid by participating dealers were based on the number of lease transactions conducted between 1991 and 1994. In Oregon, 33 dealerships paid $3,500 with Skyline Ford of Salem paying $6,000. There are a total of 46 Ford and Mercury dealers in Oregon and others may be allowed to participate after today's court filing.

Consumers wanting more information about leasing cars may contact the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only) or toll-free at 1-877-877-9392. Justice is online at www.doj.state.or.us.

Contact:

Jan Margosian, (503) 947-4333 (media line only) jan.margosian@doj.state.or.us |
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