February 3, 2023

AG Campbell Settles with Massachusetts Auto Dealer over Alleged Pricing Discrimination Affecting Black and Hispanic Consumers

Bernard Nash

Cozen O'Connor

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Cozen O'Connor

Massachusetts AG Andrea Joy Campbell reached a settlement with Hometown Auto Framingham, Inc. for allegedly violating Massachusetts’s Consumer Protection Law by charging higher prices for “add-on” goods or services to Black and Hispanic customers who purchased or leased vehicles from the company’s auto dealerships.
According to AG Campbell, a review of Hometown’s sales transaction records over a two-year period showed that the company’s Black and Hispanic consumers paid more, on average, than white consumers for purchased add-on products such as vehicle service contracts, extended “warranty” products, and tire and remote starters. Management staff at Hometown’s dealerships had discretion to set the prices charged for add-on products and earned higher commissions for add-on products sold at a higher profit margin.
Under the terms of the settlement, Hometown must pay a total of $350,000 to the AG that will be used in part to provide restitution to harmed consumers. Hometown has also agreed to provide mandatory anti-discrimination and anti-bias training to its staff, implement a standard retail price or margin for its add-on products, and increase transparency for consumers regarding add-on prices.

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