The Massachusetts Attorney General's Office has sued a Volvo-Toyota dealership, alleging it engaged in unfair, deceptive and discriminatory pricing practices against Black and Hispanic customers by charging hundreds of dollars more for vehicle add-on products.
The complaint, filed Thursday in Essex County Superior Court, alleges Jaffarian's Service Inc., a Volvo-Toyota dealership in Haverhill, Mass., charged Black and Hispanic customers , on average, hundreds of dollars more than white customers for products such as paint protection, guaranteed asset protection insurance and remote starters.
"Purchasing a vehicle is already a significant financial decision for many families and individuals — the last thing they should be worried about is unfairly paying more for a product because of their race or national origin," Massachusetts Attorney General Maura Healey said in a statement Monday.
The complaint alleges Jaffarian Auto Group "gave staff full discretion to markup the prices of add-on products." The dealership, about 35 miles north of Boston, obtained an average markup of $951 from white consumers who purchased add-on products, the complaint said. That figure was $1,461 for Black consumers, 54 percent higher, and $1,380 for Hispanic consumers, 45 percent higher.
The attorney general's office said the practice made the dealership over $170,000 in improper profits in a two-year period from January 2016 to March 2018.
Additionally, the complaint alleges the company provided "no training or supervision of its pricing policies and practices to prevent pricing discrimination."
The dealership, in a statement to the Associated Press, denied the allegations.
“Jaffarian Volvo Toyota ... has never received any complaint from any customers regarding discrimination in its sales, pricing or services and denies the Massachusetts Attorney General’s claims of discrimination,” the store's statement said.
The dealership told the AP "it is cooperating with the attorney general’s office, has supplied the office with thousands of documents and has offered to sit down to discuss the documents."
The AP also reported that the Jaffarian Volvo-Toyota President Gary Jaffarian said "we would be hurting ourselves" by discriminating because a significant portion of the store's employees are Black and Latinx and the dealership serves an area with a significant Latinx population.
"Toyota Motor Sales U.S.A. Inc. (TMS) does not own, operate or manage Jaffarian's Service Inc.," Toyota Motor North America spokesman Victor Vanov said in an emailed statement to Automotive News. "Toyota dealerships are independently owned and operated, and TMS does not have control over their operations or management of their employees. ... These alleged actions are entirely inconsistent with our core values."
A Volvo Cars USA spokesman said in an email to Automotive News that the automaker had no comment.
Such discriminatory practices would violate Massachusetts' Consumer Protection Law and the Public Accommodation Law, which prohibits discrimination on account of race, color and national origin in public places, the attorney general's office said.
Massachusetts is seeking injunctive relief, restitution, civil penalties and attorneys' fees and costs, the complaint said.
Jaffarian Volvo-Toyota says on its website that it was the first Volvo dealership in New England. In 1962, Jaffarian opened a Toyota dealership, which the group says was the first Toyota store in New England.
