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Attorney General Baker Reaches Settlement With Ford Motor Credit Company and Ford and Lincoln Mercury Dealers Over Leasing Charges

PRESS ADVISORY

Attorney General Baker Reaches Settlement With Ford Motor Credit Company and Ford and Lincoln Mercury Dealers Over Leasing Charges

June 10, 2004

Attorney General Thurbert Baker joined forces with Attorneys General from thirty-eight other states in reaching a consumer settlement with Ford Credit which impacts more than 150 thousand Ford consumers.

“Today’s settlement marks an agreement by Ford Motor Credit Company and its dealers to address the issues raised by our investigation. This settlement will not only lead to better consumer practices, but it will also provide redress for affected consumers,” Attorney General Baker stated.

The settlement was reached with Ford Credit and 1,300 participating Ford and Lincoln Mercury dealers. Consumers who are notified by Ford Credit may qualify for a restitution check of $100.00 from Ford Credit.

The settlement involves Ford Motor Credit’s leasing practices. The “Red Carpet” leasing program came under the scrutiny of the multistate working group of Attorneys General when investigators discovered that early termination of vehicle leases resulted in charges that were sometimes higher than the actual balance owed on the lease. 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 settlement, Ford agreed to change its Red Carpet lease contract language to clearly explain a consumer’s rights when terminating a vehicle lease early. The change involves not only Ford Credit branches but also the practices at the Ford and Lincoln Mercury stores.

Ford Credit has also agreed to pay for the administration of the settlement. Consumers for the years of 1991 through 1994 will receive direct notice from Ford Credit. Other consumers may also participate by calling the administrator of the settlement at 1-800-221-3312 or accessing the following website www.gilardi.com.