Mass Attorney General Reaches Settlement With Hometown Auto Framingham Over Pricing Discrimination
In full transparency, the following is a press release from the Massachusetts Attorney General’s Office
BOSTON – Massachusetts Attorney General Andrea Joy Campbell announced that her office has reached a $350,000 settlement with Hometown Auto Framingham, Inc. to resolve allegations that the company engaged in the unfair, deceptive and discriminatory pricing of “add-on” products sold to Black and Hispanic consumers.
The assurance of discontinuance, filed in Suffolk Superior Court, alleges that Hometown Auto, which operates two car dealerships located in Wellesley and Danvers, charged Black and Hispanic consumers higher prices for “add-on” products in comparison to white consumers.
“Add-on” products are extra goods or services sold to a consumer who purchases or leases a car; these include products like guaranteed asset protection (GAP) products, paint protection products, tire and wheel protection products and remote starters.
“Consumers need to know that their race or ethnicity will have absolutely no effect on the type of service they receive from Massachusetts auto dealerships or the prices they will be charged,” said AG Campbell. “My office is committed to protecting consumers from predatory and discriminatory practices that stand in the way of upward mobility, and we will continue our advocacy to ensure all consumers are being charged for services equally and fairly.”
In 2018, the AG’s Office began an investigation into discriminatory pricing of “add-on” products at Massachusetts auto dealerships, including Hometown Auto. The AG’s Office determined that Hometown charged higher prices to its Black and Hispanic consumers for the same “add-on” products sold to white consumers.
The AG’s Office alleges that Hometown’s conduct violated the state’s Consumer Protection Act, which prohibits unfair or deceptive acts and practices in trade or commerce.
Under the terms of the settlement, Hometown has agreed to pay $350,000 – $200,000 of which will be allocated to provide restitution to harmed consumers – and to enact several business practice changes in order to decrease the likelihood of pricing disparities in the future. Some of these changes include:
- Providing staff training on implicit bias and the obligation not to discriminate when pricing products.
- Requiring disclosure of “add-on” product pricing to provide transparency on the price of any add-on product offered to consumers.
- Improving oversight of “add-on” product pricing by implementing a standardized pricing policy for “add-on” products that limits when and why staff may deviate from such prices and requires documentation and oversight for pricing deviations.
- Providing compliance monitoring information to the AG’s Office concerning future “add-on” product sales.
This matter is part of an ongoing investigation into Massachusetts auto dealerships concerning the pricing of “add-on” products. In September 2022, the AG’s Office announced a lawsuit against Jaffarian Volvo Toyota, of Haverhill, for charging Black and Hispanic consumers hundreds of dollars more, on average, than white consumers for “add-on” products.
This matter was handled by Deputy Division Chief Mychii Snape, Assistant Attorney General Schuyler Daum, and Paralegal Sky Karp of the AG’s Consumer Protection Division with assistance from Assistant Attorney General Jonathan Burke in the AG’s Civil Rights Division.