Attorney General Calls Ford's "Red Carpet" To The Carpet

June 11, 2004

Attorney General Steven Rowe announced today that his office has filed in Kennebec County Superior Court an Unfair Trade Practices Act complaint and consent agreement settling claims against Ford Credit and Ford and Lincoln Mercury dealers over Ford's "Red Carpet" leasing program. Thirty-seven other states filed similar documents today. The settlement will result in 595 Maine Ford consumers getting $100 refund checks from Ford Credit. Nine dealers in Maine have joined the settlement. Eligible consumers will be contacted directly by Ford Credit. Ford Motor Company will also pay the State of Maine $12,820, and Maine Ford and Lincoln Mercury dealers will pay $34,020. This money will be used by the Attorney General for consumer law enforcement and education.

The states alleged that Red Carpet customers who terminated vehicle leases early were sometimes charged an amount 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. The consumers were usually unaware of any of this because the dealers provided the payoff figure, not Ford Credit.

The settlement is the result of the cooperation of Ford Credit and the 1,300 participating Ford and Lincoln Mercury dealers, who will pay over $6.2 million in legal fees and costs. Nationwide, more than 150,000 Ford consumers will get checks.

Ford has 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 dealers.

More information about the settlement is available from the settlement administrator at 1-800-221-3312 or <>. "We are pleased to get this relief for Maine consumers, both in the form of the checks and the changes in business practices," Attorney General Rowe said.