A company that insures independent providers of extended service plans is suing Ford Motor Co. and its captive finance arm. The antitrust lawsuit alleges that Ford seeks to monopolize service contract business at its dealerships.
Marathon Financial Insurance Co. Inc. of Houston alleges Ford Motor Credit Co. has illegally limited Ford Motor's competition for service contracts. It has done so, Marathon says, by refusing to finance service contracts that are not backed by highly rated insurers.
Ford Motor would not comment on the lawsuit.
Several services, most notably A.M. Best Co., rate the financial health of insurers. Lenders use these ratings to help assess an insurer's ability to pay claims if a service contract provider fails.
The Marathon lawsuit alleges Ford Credit requires an insurer rating of A-minus or better to finance a service contract program. Marathon has not applied for a rating by A.M. Best, says Greg Casas, a lawyer for Marathon.
Casas says Marathon, which began operations in 2001, has not been in business long enough to get a rating. But A.M. Best's Web site indicates that the service rates startup companies.
Ford Motor's policy on ratings is a common industry practice. Banks and finance companies typically set minimum ratings for insurers of service contracts. They say this policy protects consumers, dealers and lenders from the prospect of unpaid claims if a contract provider goes out of business.
General Motors Acceptance Corp. also requires an A-minus rating or better. Toyota Financial Services and DaimlerChrysler Services require a B-plus rating or better.
Marathon filed the lawsuit last month in U.S. District Court in Texarkana, Texas. It alleges that Ford Motor and Ford Credit also favor dealerships that sell Ford Motor service contracts by:
You may e-mail Donna Harris at