One of Toyota’s famous slogans is “Moving Forward.”
However, the only thing this company seems to be doing is moving backward. Recently, the Japanese car company was caught red-handed discriminating against its minority customers. Toyota was charging higher interest rates on auto loans to African-American and Asian and Pacific Islanders, in comparison to Caucasian borrowers. According to CBS Los Angeles, “the average African-American borrower paid more than $200 more during the term of a loan, and the average Asian/Pacific Islander borrower who paid more than $100 over the term of a loan.” The Equal Credit Opportunity Act prohibits this action, but Toyota seemed to feel exempt from this law.
Read more here to see what Toyota thinks of these allegations.
To right their wrongs, Toyota has agreed to pay $20 million to borrowers who took out loans between the 2011 and 2016. Toyota also agreed to pay $2 million to Blacks and Asians who were discriminated against.
This is, sadly, a direct example of the racial gap and income inequality effect. When companies such as Toyota feel that people who are not Caucasian deserve to pay higher interest rates, it creates distrust between the consumer and the producer. It also may put minorities in debt they really shouldn’t be in. This debt could go on to affect their credit score, which could affect any future loans. This further advances income equality because Johnny who is African American will have to pay more money than Billy, his Caucasian peer — merely because of his race. Read more here!