The Federal Trade Commission and Illinois Attorney General have levied the largest penalty against a car dealer to date, asking for $20 million.
The FTC last week announced the proposed settlement with Leader Automotive Group and their parent company Auto Canada. The FTC alleges the company deceived customers about the price and availability of vehicles, charged for add-ons without consent, added unnecessary fees, posted fake reviews and did not disclose some vehicles were imported from Canada.
“Working closely with the Illinois Attorney General, we are holding these dealerships accountable for unlawfully extracting millions of dollars from consumers through a textbook bait-and-switch scheme, and bolstering their poor reputation with fake reviews,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection in a press release. “We will continue our work to ensure that consumers are not being overcharged for cars, and that honest dealers do not need to compete with firms that cheat.”
AutoCanada issued its own release, stating it would accept the agreement to resolve the investigation.
“As part of the resolution, the Company will pay U.S. $20 million to the FTC and the State of Illinois in monetary relief, with no civil penalties. The agreement contains no admission of wrongdoing by the Company, brings the FTC’s investigation to a close, and puts this matter behind the Company,” the statement read.
The FTC said the $20 million will be used to provide refunds to customers.
According to the FTC release, Leader Automotive Group operates North City Honda; Crystal Lake Chrysler Dodge Jeep Ram; Hyundai of Lincolnwood; Kia of Lincolnwood; Bloomington Normal Auto Mall (Mercedes-Benz of Bloomington, Lincoln of Normal, Volkswagen of Bloomington Normal, Volvo Cars Normal, Subaru of Bloomington Normal, and Audi Bloomington Normal); Autohaus Motors (Mercedes-Benz of Peoria, Porsche Peoria, Volkswagen of Peoria, and Audi Peoria); Chevrolet of Palatine; Hyundai of Palatine; Toyota of Lincoln Park; and Toyota of Lincolnwood.
