Attorney General Kwame Raoul, alongside the Federal Trade Commission (FTC), has announced a proposed $20 million settlement with Leader Automotive Group and its parent company, AutoCanada. The settlement aims to address allegations that Leader defrauded consumers during vehicle purchases.
The proposed agreement requires Leader to refund affected consumers with the $20 million payment. Additionally, all Leader dealerships in Illinois must clearly disclose a car's offering price, which excludes only mandatory government charges. The companies are also required to obtain buyer consent for add-on product charges.
“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,” said Raoul. “I appreciate the collaboration with the Federal Trade Commission to ensure bad actors are held accountable and our consumers are protected from deceptive business practices.”
“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. “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.”
The lawsuit filed by Raoul and the FTC alleges violations of federal and state laws by Leader Automotive Group and former Vice President of U.S. Operations James Douvas. These include misleading customers about vehicle pricing and availability, charging for expensive add-ons without consent, imposing unwanted fees, posting fake reviews online, failing to disclose Canadian imports to U.S. buyers, among other illegal activities.
Leader is accused of advertising new and used cars at low prices online but then inflating costs once customers arrived at dealerships. Salespeople allegedly claimed vehicles came with preinstalled add-ons like protective coatings costing thousands of dollars—charges not included in advertised prices—and often failed to install these products despite charging customers.
Additionally, Leader is alleged to have falsely advertised vehicles as "certified pre-owned," adding certification fees while failing to conduct necessary certification work required by manufacturers.
The complaint also states that some vehicles sold were manufactured for the Canadian market without disclosing this fact. Importing such cars can void manufacturer warranties; however, Leader reportedly misrepresented these cars as warranty-covered.
Leader operates several Illinois dealerships including North City Honda; Crystal Lake Chrysler Dodge Jeep Ram; Hyundai of Lincolnwood; Kia of Lincolnwood; Bloomington Normal Auto Mall comprising Mercedes-Benz of Bloomington, Lincoln of Normal among others; Autohaus Motors covering Mercedes-Benz of Peoria among others; Chevrolet of Palatine; Hyundai of Palatine; Toyota of Lincoln Park; Toyota of Lincolnwood.
Bureau Chief Elizabeth Blackston led the settlement proceedings along with Deputy Bureau Chief Jacob Gilbert, Supervising Attorney Margaret McWhorter, Assistant Attorneys General William Wingo and Christen Lee from Raoul’s Consumer Fraud Bureau.