MA Car Dealer Sued For Overcharging Black, Hispanic Customers

HAVERHILL, MA — An Essex County car dealership charged Black and Hispanic customers more for cars through add-on products, sometimes charging as much as $500 more than white customers, according to a new state lawsuit.

Attorney General Maura Healey is suing Haverhill-based Jaffarian Volvo Toyota over the practice, which Healey said happened when sales staff would upsell customers on products like paint protection and warranties.

Black and Hispanic customers paid between $429 and $510 more for those add-ons, Healey said, totaling about $170,000 in "improper profits." The markups came at the end of car transactions, when customers were working with finance managers after negotiating the price of the vehicle.

According to Healey, the dealership allowed finance managers to increase the price of add-on products at their own discretion, and incentivized the behavior by sharing add-on profits with salespeople — a common practice across the auto sales industry.

State attorneys reviewed about two years worth of transactions between 2016 and 2018, and found that salespeople would charge Black and Hispanic customers about $1,400 for add-ons, while white customers paid about $950 on average. The dealership served about 2,000 white customers over the two years of the audit and just under 400 Black and Hispanic customers, according to the lawsuit.

"NCLC research shows that discrimination is widespread in the car sales and finance industry. Stopping discrimination is important to protect both car buyers and the honest dealers who charge people the same price no matter their race or national origin," National Consumer Law Center staff attorney John Van Alst said in a news release.