Lydia Majors negotiated to purchase a used 1998 Dodge Neon for $12,450 and accepted the dealership's offer to arrange financing. After receiving Majors' credit report, Ford Credit agreed to buy an assignment of her loan contract at 15 percent. The dealership then quoted Majors an annual percentage rate of 19.75 percent, and she agreed.
Ford Credit collected the increased finance charge from Majors and returned the markup to the dealership.
The loan contract disclosed the price of the car, the finance charge and the annual percentage rate, but not the loan markup.
Majors later unsuccessfully tried to rescind the contract and return the car, alleging there were problems with it. After she stopped making payments, Ford Credit sold the Neon at auction and sued Majors for a $7,762 deficiency.
She countersued for damages, attorney fees and an order prohibiting the lender from similar conduct in the future. But a lower-court judge rejected Majors' counterclaims of consumer-law violations. Majors did not sue the dealership.
The unanimous three-judge appeals panel sided with Ford Credit, holding that the markup is not essential information in vehicle loan transactions and saying that Majors had all the information necessary to evaluate the offer before accepting or rejecting it.