The United States government found sufficient evidence after an investigation that Honda deliberately overcharged black, Asian and Hispanic car buyers over the years and ordered the Japanese auto manufacturer to repay $24 million to those wronged.
Minority customers were charged an average of $150 to $250 more than Caucasian customers.
The federal government started investigating the American Honda Finance Corporation, a unit of Honda (HMC), CNN reports, in 2013 for violating fair lending laws. The Consumer Finance Protection Bureau stated that “minority borrowers’ creditworthiness did not account for boosting loan rates,” CNN said.
Honda agreed to pay the penalty amount.
According to CNN:
Honda Finance, which issues loans to customers that finance car purchases through dealerships, allowed dealers to mark up the rates — and that led to the discrimination, the bureau said.
Honda’s finance arm is one of the largest auto lenders in the U.S., and the affected borrowers took on loans from the company between January 2011 and July 2015.
In addition to the multi-million dollar payout, Honda said it will start capping “dealer markups” sometime this year.
“AHFC strongly opposes any form of discrimination, and we expect our dealers to uphold this principle as well. We firmly believe that our lending practices have been fair and transparent,” Honda said in a statement Tuesday.
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