ST. LOUIS — For 3½ years, Dorothy Robinson and Denise Ligon walked into work at a Mercedes-Benz dealership on Hampton Avenue. And they say they were pressured to negotiate deals they knew weren’t fair.
“When I had an African American client, it was more difficult to get the deal approved,” Robinson said.
“I witnessed that they treated Black customers differently,” Ligon said.
Every time they voiced their concerns to management – they said nothing happened.
“I got frustrated for my clients,” Robinson said. “I said something to the manager like ‘you are overcharging them’.”
They wanted others to know what they said they experienced. So they joined forces, suing the dealership’s owner, Tristar Imports, for discrimination, harassment and retaliation.
The lawsuit alleged that they, along with their female and Black co-workers, were treated more harshly.
Ligon said she had dozens of glass awards that lined a shelf in her office. She says one of her managers banged on the glass to her office so hard one day that many of those sales awards fell and cracked. Her attorney, Mary Anne Sedey, used the broken awards to demonstrate the discriminatory treatment during the two-week trial that took place in the fall of 2022.
“It wears on you day in and day out to be treated disrespectfully, to be treated differently than your coworkers just because you have Black skin or you happen to be a woman in a man's world,” Sedey said.
In one of the counts, the lawsuit alleged a manager “often refused to accept checks from Plaintiff Robinson’s African American customers but accepted checks from the white customers who came to the dealership.”
The 5 On Your Side I-Team also obtained depositions, where both women alleged managers would mark up interest rates or hold checks for black customers.
At one point, Robinson said she raised her voice with a manager while trying to negotiate a deal she thought was too expensive.
In that same deposition, she testified that she was soon suspended, and that there were “other sales people complaining about the practice.”
“There were a number of practices that they observed where Black customers were just treated differently than white customers,” Sedey said. “For instance, a Black customer would want to write a personal check for a deposit and take the car, and they would say, ‘No.’
“But it was routinely something that was permitted to white customers. There was a story told at the trial of almost profiling of Black customers where the manager would get online and look at where a person lived who was African-American and say, ‘Oh, he can't afford that car,’ based on where he lived and the fact that he was Black.”
Sedey said her clients also detailed during trial how Black consumers would be quoted higher interest rates during what’s known as “penciling a deal.” It happens as part of a very preliminary stage of a sale when someone says they want to buy a car, so multiple credit checks aren’t run on potential buyers that could harm their credit, she said.
“There would be the assumption that Black customers were going to have to pay a higher interest rate because their credit wouldn't be any good,” Sedey said. “So there were a number of different ways in which Black people were just simply treated differently as customers.
“And these are people who are buying Mercedes Benz cars. So, to assume that people who had come to a dealership to buy a Mercedes Benz automobile were not people of means, that's a classic stereotype.”
“It’s so much bigger than what people know,” Robinson added.
Tristar and the dealership declined the I-Team’s requests for an interview about the discriminatory accusations three separate times. It denied the allegations in court.
The I-Team found similar allegations in car lending across the country. The Federal Trade Commission fined an Illinois auto dealer last year for “sneaking in illegal junk fees to Black consumers.” The FTC found that the dealership also illegally tacked on fees for unwanted payment insurance and paint protection.
It alleged that the moves cost buyers hundreds, sometimes thousands of dollars in hidden fees.
And in 2013, the Consumer Financial Protection Bureau ordered Ally Financial to pay over $90 million in damages and penalties for spiking interest fees on Black borrowers.
“They have an incentive to, unfortunately, charge people as much as they can,” said John Van Alst, an attorney with the National Consumer Law Center (NCLC).
His group has researched discriminatory car lending practices for nearly 20 years.
“There really isn’t any transparency, and people don’t know what’s happening,” he said. “It’s hard for a consumer to even know if they were discriminated against. You can’t tell after you walk out of the dealership.”
NCLC released a report revealing that auto financing companies often charge Black and Hispanic consumers between $300 and $500 more in interest rate markups compared to similarly-qualifying white borrowers.
Alst is lobbying for more transparency in the process.
“It should be about the price set on the value of the car and the cost for credit, the interest you’re charged based on your credit-worthiness, rather than your race or ethnicity,” he said.
Robinson and Ligon won their lawsuit in November, and a jury awarded them $1.8 million. Their attorney said Tristar has paid the judgment in the case.
The two hope the decision leads to fair deals for car buyers of all races everywhere.
“It was something that I talked about for so much time, many years,” Ligon said. “Finally, they believed me.”
NCLC recommends if you’re trying to get a car loan – to finance it through a bank or credit union where rates can be lower.
The organization is also pressuring Congress to make lending practices and rates more transparent, so buyers know the terms of a fair deal.
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