The Massachusetts Attorney General has announced a $350,000 settlement with a dealership group accused of engaging in pricing discrimination for add-on products.
The attorney general had alleged in the lawsuit that the dealerships were charging Black and Hispanic customers higher average prices for “add on” products than they did White customers.
The settlement requires the dealership to adopt and follow the NADA/NAMAD/AIADA Model Dealership Voluntary Protection Products (VPP) Policy. The Massachusetts Attorney General sees the measure as a way to decrease pricing disparities among ethnic groups.
The settlement also requires dealerships to:
- Provide staff training on implicit bias and the mandate to not discriminate when pricing products.
- Provide transparent pricing of add-ons.
- Implement a standardized pricing policy for “add-on” products that limits when and why staff may deviate from such prices.
- Require documentation and oversight for pricing deviations.
- Provide compliance monitoring information to the AG’s Office concerning future “add-on” product sales.
"In today's regulatory environment, adopting a VPP Policy, along with a Fair Credit Lending Policy, is necessary," said Adam Crowell, President & General Counsel at ComplyNet. "But be forewarned, the regulators will not accept a dusty policy sitting on a shelf; they expect it to be followed, they expect oversight, they expect corrective actions, and they expect periodic analysis and improvements."