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Adam CrowellFeb 2, 20231 min read

Discriminatory pricing action for add-ons settles for $350K and requires dealerships implement NADA's VPP Policy

February 2, 2023.  A $350,000.00 dealership settlement with the Massachusetts Attorney General requires dealerships implement and follow the NADA/NAMAD/AIADA Model Dealership Voluntary Protection Products (VPP) Policy to resolve alleged pricing discrimination for add-on products.

On January 31, 2023, the Massachusetts Attorney announced a $350,000.00 settlement with a dealership group that was accused of engaging in pricing discrimination for add-on products.  The Massachusetts AG had alleged that the dealerships had charged Black and Hispanic customers higher average prices for "add-on" products in comparison to White customers.

As part of the settlement, the dealership is required to adopt and follow the NADA/NAMAD/AIADA Model Dealership Voluntary Protection Products (VPP) Policy, which was recognized by the Massachusetts Attorney General as a way to decrease the likelihood of pricing disparities in the future.  Among other things, the dealerships will:

  • Provide staff training on implicit bias and the obligation not to discriminate when pricing products.  
  • Require disclosure of “add-on” product pricing to provide transparency on the price of any add-on product offered to consumers. 
  • Improve 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.  
  • 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," cautioned Crowell, "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."  "In fact," continued Crowell, "regulators like the FTC have penalized dealerships who have adopted and not enforced these types of policies."  "This is one of the many reasons why it is imperative to have a proactive F&I Sales and Advertising compliance program to help adopt and enforce compliance before there is a much bigger issue," concluded Crowell.

To learn more about, ComplyNet's F&I Sales and Advertising compliance solutions, CLICK HERE, or SCHEDULE A SOLUTIONS DEMO.


Adam Crowell

Adam is Vice President of Legal and Corporate Development at KPA and ComplyNet and is a licensed practicing attorney with over 21 years of experience primarily representing dealerships. Adam is a frequent speaker on the local, state, and national levels, including presentations to the National Automobile Dealers Association (NADA), the National Independent Auto Dealers Association (NIADA), and the National Association of Dealer Counsel (NADC).