- Originally published in the Detroit Free Press October 30, 2004,
Copyright 2004 Knight Ridder/Tribune News Service
By Sarah A. Webster
The
financing arm of DaimlerChrysler AG that makes auto loans has agreed to
settle two lawsuits in Texas that accuse the company of discriminating
against Hispanic and black loan applicants.
James
Ryan, a spokesman for DaimlerChrysler Services North America LLC, based
in Farmington Hills, Mich., said the terms of the deals are not
finalized and would not be disclosed "due to our confidentiality
obligations to the plaintiffs."
Robert Wilson, the San Antonio attorney representing Rick Perez, a
Hispanic dealer, and his customers, did not return a telephone call for
comment.
The
lawsuits filed in 2003 against DaimlerChrysler by Perez and his
customers accused the company of tampering with a computer program that
was supposed to automatically and objectively evaluate car loan
applications, making it harder to get loans at Perez' now-defunct
dealership in a Galveston, Texas, minority neighborhood.
According
to the lawsuits, that caused creditworthy applicants to be denied loans
or be offered less favorable financing terms than they should have been.
DaimlerChrysler
has said its lending policies are fair and discrimination isn't
tolerated. The company has previously accused Perez of trying to recoup
losses after his store failed.
"What we
are faced with is a dealership which was unsuccessful in its business
and financial management," the automaker said in a statement March 3.
"He filed for Chapter 11, sold his store and the moment it was sold,
tries to manipulate the court with a frivolous lawsuit, which makes
unsubstantiated claims of discrimination designed for his own financial
gain."
DaimlerChrysler also contended that the Texas lawsuits were copycats of two lawsuits filed earlier in 2003 in Chicago.
Those
lawsuits, filed by former dealer Gerald Gorman and his customers, are
progressing through the courts. Gorman also alleges that
DaimlerChrysler tampered with the computer program that is supposed to
automatically, objectively evaluate loan applications. His stores were
in minority neighborhoods. Gorman is white.
The lawyer handling the Chicago lawsuits could not be reached for comment.
In
previous interviews, Perez, who has been in the auto sales business for
26 years, said that, when he began complaining about the computer
problem, which he said hurt his business, DaimlerChrysler worked to put
him out of business.
"It would take us hours and hours to get callbacks" on loans, Perez said in an interview this year.
Sales
at Rick Perez Autonet, which sold Chrysler, Plymouth, Dodge, Jeep and
Mitsubishi vehicles, dropped from about 60 vehicles a month to about 20
because of the way DaimlerChrysler approved loans, Perez alleged.
Perez's lawsuit, like Gorman's, also alleged that DaimlerChrysler
representatives used racial slurs when talking about customers.
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(c) 2004, Detroit Free Press.