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.

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