A federal judge here has dismissed a settlement between a unit of Associates First Capital Corp. and 53,000 borrowers who claimed the finance company illegally paid bounties for high-rate loans. In his ruling Monday, U.S. District Court Judge George O'Toole said the borrowers were too dissimilar to constitute a class. The decision effectively dismantles a four-year-old class action against Ford Consumer Finance that was expected to cost Associates $10 million.

Ford Consumer Finance agreed in 1996 to settle the suit by paying $50 cash or $250 credit toward a new loan to each borrower in the class. At the time, the consumer watchdog group Neighborhood Assistance of America said the settlement was too low.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.