An auto company that operates 10 car dealerships in Illinois is set to pay $20 million to settle allegations of defrauding customers following an investigation by the Illinois attorney general and the Federal Trade Commission.
Leader Automotive Group and its parent company AutoCanada weren’t clear about car prices at their dealerships and engaged in “bait-and-switch tactics” by luring customers with lower prices and later tacking on charges, according to Illinois Attorney General Kwame Raoul.
“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,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a news 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.”
In Raoul’s lawsuit, the companies are accused of breaking federal and state laws through their deceptive business practices, including posting fake online reviews and failing to disclose American customers were buying cars imported from Canada.
The complaint also says Leader advertised new and used cars with a price that often ended up being lower than what customers would ultimately pay, with salespeople saying the car came with required “preinstalled add-ons,” but Leader often failed to actually install them despite charging customers at a higher rate.
Along with paying the $20 million settlement, which will be used to refund affected customers, Leader is required to clarify cars’ offering prices at all Illinois dealerships. The companies will also need to get consent from customers before charging for add-ons, according to the settlement.
The following Illinois car dealerships are operated by Leader:
- North City Honda
- Crystal Lake Chrysler Dodge Jeep Ram
- Hyundai of Lincolnwood
- Kia of Lincolnwood
- Bloomington Normal Auto Mall, which includes Mercedes-Benz of Bloomington, Lincoln of Normal, Volkswagen of Bloomington Normal, Volvo Cars Normal, Subaru of Bloomington Normal and Audi Bloomington Normal
- Autohaus Motors, which includes Mercedes-Benz of Peoria, Porsche Peoria, Volkswagen of Peoria and Audi Peoria
- Chevrolet of Palatine
- Hyundai of Palatine
- Toyota of Lincoln Park
- Toyota of Lincolnwood