Auto Dealership To Pay $350k Over Alleged Discrimination Against Black And Latino Customers

A car dealership company with outlets in Danvers and Wellesley will pay $350,000 to resolve claims that it discriminated against Black and Hispanic consumers, Attorney General Andrea Joy Campbell announced.

Hometown Auto Framingham Inc., which operates Wellesley Mazda on Worcester Street and North Shore Mazda on Newbury Street in Danvers, is accused of deceiving customers of color and charging them more for add-on products like guaranteed asset protection, paint protection, tire and wheel protection and remote starters – than the usual charges for white customers. The company had priced "add-on" items unfairly, deceptively, and discriminatorily for Black and Hispanic consumers, as per the press release.

"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," Attorney General Andrea Campbell said in a statement. "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."

The AG's Office launched an inquiry into Hometown Auto and other Massachusetts auto dealerships' discriminatory pricing of "add-on" products in 2018. The AG's Office found that Hometown charged its Black and Hispanic customers greater pricing for the same "add-on" products that were sold to white customers. The Consumer Protection Act of the state, which forbids unfair or misleading acts and practices in trade or commerce, is allegedly violated by Hometown, according to the AG's Office.

The AG's office claims in court documents that Hometown allowed employees the freedom to set their prices for these add-on items and paid more commissions when they sold them for higher prices. To avoid discriminatory behavior in these sales, the corporation did not train or supervise its employees. Hometown denied the allegations it discriminated against Black and Latino customers.

As part of the agreement, Hometown will give the state $350,000, of which $200,000 will go toward compensating the affected customers. The company will also teach employees about implicit bias and non-discrimination, set standard pricing for add-on items, be upfront with clients about prices, and provide the AG's office with compliance monitoring information.

In September, the AG filed a lawsuit against Jaffarian Volvo Toyota of Haverhill for allegedly charging Black and Latino customers hundreds of dollars more on average than white customers. 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 handled this matter.