Leader Automotive Group, a car dealership network in Illinois, has agreed to a $20 million settlement to resolve allegations of systematic consumer fraud. The Federal Trade Commission and the Illinois Attorney General accused the company of using deceptive advertising practices, luring customers with low prices for cars that were often not available at that price. Once at the dealership, customers were allegedly pressured into purchasing expensive add-ons that were falsely claimed to be required.
Leader Automotive Group frequently advertised new and used cars online with low prices designed to entice consumers into their dealerships, but those prices were often false, according to a court complaint. Drivers who purchased vehicles from a group of Illinois dealerships could qualify for a chunk of a proposed $20 million settlement.
The Federal Trade Commission and Illinois Attorney General Kwame Raoul's Office reached a settlement, the offices announced Thursday, to resolve allegations Leader Automotive Group and its parent company, AutoCanada,'systematically defrauded consumers.'Leader frequently advertised new and used cars online with low prices designed to entice consumers into their dealerships, but those prices were often false, according to a court complaint filed by the FTC and the Illinois Attorney General. Raoul stated that when consumers arrived at a Leader dealership, salespeople would often say the car came with preinstalled add-ons like protective coatings and theft protection that cost thousands of dollars. The lawsuit alleged salespeople told customers the add-ons were required, despite not being included in the advertised price of the car. A survey of Leader customers showed that nearly 80% of them were charged for at least one add-on without authorization or because they were falsely told the add-on was required, according to a FTC news release. “This dealership network engaged in bait-and-switch tactics by luring consumers into their dealerships with lower prices only to either require consumers to purchase allegedly pre-installed add-on products or charge consumers for those products without their knowledge or permission,” Raoul said, in part.According to the court complaint, the add-ons were wildly profitable for Leader, with dealerships at one point reporting more than 99% profit on the
Automotive Fraud Consumer Protection Deceptive Advertising Settlement
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