Hometown Auto has agreed to pay $350,000 — $200,000 of which will be allocated to provide restitution to harmed consumers
Boston—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, including products like guaranteed asset protection (GAP) products, paint protection products, tire and wheel protection products and remote starters.
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.