Leader Automotive Group used deceptive practices to lure buyers, failed to provide purchased services
A group of 10 car dealerships and their parent company will pay $20 million to settle claims they used deceptive and illegal tactics to lure customers.
The Federal Trade Commission filed a complaint and settlement order asking Leader Automotive Group to pay the fine to refund defrauded customers. The lawsuit stems from two major deceptive practices.
First, the dealerships would require employees to post fake online reviews – even threatening to withhold bonuses or pay or offering to pay family members of employees to post reviews.
Second, the company would advertise low prices and then require add-ons costing hundreds or sometimes thousands of dollars. The dealership would indicate the add-ons were “pre-installed” and so the increase in price was required. Leader made as much as 99% profit on these non-essential add-ons. In fact, in some cases, the add-ons were not even installed, even though the customer was charged for them.