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A New York department store has paid out $525000 (R5.7-million) after it admitted to racially profiling customers at its flagship Madison Avenue shop.

During an anti-shoplifting drive at Barneys, store detectives and undercover police targeted black and Hispanic shoppers, often frisking them or detaining them on suspicion of credit-card fraud, authorities found.

Barneys must hire an "anti-profiling consultant" for two years and improve training of security and sales personnel in addition to the hefty fine, New York state attorney Eric Schneiderman said.

After complaints, data confirmed that minorities were disproportionately detained.

CEO Mark Lee said Barneys has "no tolerance for discrimination".

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