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John Wanamaker Fined Over Credit Bias Against Women

March 1, 1989

PHILADELPHIA (AP) _ Department store chain John Wanamaker has been ordered to pay $90,000 and subject its credit process to future review to settle a federal complaint that it discriminated against female credit applicants.

The government claimed Wanamaker violated the Equal Credit Opportunity Act by approving or denying credit applications of married couples based solely on the credit histories of husbands.

″This is the first time that we have brought a case that involved a complaint that women...who had perfectly good credit histories (but) were denied credit because Wanamakers only checked their husbands’ ratings,″ said Jean Noonan, the Federal Trade Commission’s associate director for credit practices.

The agreement was part of a consent decree and other documents filed Monday in U.S. District Court. Attorneys for the FTC said Wanamaker had been discriminating against women seeking credit since 1977.

Wanamaker agreed to comply with federal statutes governing equal credit opportunity and allow the government to monitor its performance for three years.

Lawrence McDade, assistant director of the Justice Department’s Office of Consumer Litigation, said if a husband had a bad credit record but his wife’s credit history was good, credit would be denied.

″It wasn’t based on legitimate, objective criteria,″ McDade said. ″It was based on sex.″

John Wanamaker, which is owned by Woodward & Lothrop department stores of Washington, runs 15 stores with annual sales of about $410 million and more than 700,000 credit-card holders.

Woodward & Lothrop said the FTC’s complaint involved credit practices at Wanamaker that preceded its acquisition of the chain in late 1986.

Penalties for violations of the Equal Credit Opportunity Act can run higher than $200,000. Noonan said the $90,000 fine is ″around the middle range.″

Wanamaker must pay the fine within 10 days. It also must report to the FTC within 60 days on how it is complying with the Equal Credit Opportunity Act.

In addition, Wanamaker must submit to the FTC a random sample of up to 2,000 credit applications that have been approved, rejected or withdrawn within the prior 12 months, and make available upon request all applications filed during the next 25 months.

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