Record $20M FTC settlement points to active regulatory environment

A series of regulatory actions during the past month, including the largest F TC settlement involving a dealership, indicates that regulatory enforcement shows no signs of abating. The FTC reached a record-breaking $20 million settlement with Chicago -based Leader Automotive Group and its parent company AutoCanada over allegations of bait-and-switch pricing, fake reviews and concealed or misrepresented finance and insurance (F&I) products, according to a Dec. 19 FTC release. Leader Automotive Group consists of 16 dealerships in Illinois. The settlement serves as an expensive reminder and warning for dealerships to maintain strict compliance, even under the incoming presidential administration, which many expect to relax regulations , Kenneth Rojc , managing partner of the automotive finance group at law firm Nisen & Elliot , told Auto Finance News . "Dealers have to be transparent on the advertising, sale, pricing disclosure , and how they handle ancillary products,” he said. AutoCanada will pay $19.8 million to the FTC and $200,000 to the state of Illinois as part of the enforcement action, though the company denied any wrongdoing. FTC now targets Lindsay Auto The FTC and Maryland Attorney General’s Office filed a similar complaint against Lindsay Automotive Group , which consists of nine dealerships across the Washington, D.C., metro area. The complaint accuses the group of “systematically deceiving and overcharging car-buying consumers for years, costing them millions of dollars in junk fees and unwanted add-on products, ” according to a Dec. 27 complaint filed in the U.S. District Court for Eastern Virginia. The filing named three Lindsay dealerships — Lindsay Chevrolet of Woodbridge , Lindsay Chrysler-Dodge-Jeep-Ram and Lindsay Ford — as well as management. President Michael Lindsay was named along with Chief Operating Officer John Smallwood and Paul Smyth , general manager. A representative could not be reached for comment by publication time, but the group previously issued statements denying the accusations, refuting any suggestion of improper conduct, citing plans to resolve the matter through the legal process. FTC allegations more severe The Leader Automotive Group case bears similarities to previous allegations against Ed Napleton Automotive Group and Asbury Automotive Group . In 2022, Napleton settled with the FTC and the state of Illinois for $10 million after being accused of charging illegal junk fees for unwanted ancillary products. In August 2024, Asbury Automotive faced similar accusations from the FTC regarding deceptive aftermarket sales practices, which the company has denied. That case remains pending. However, the Leader case represents "a level-up in terms of the severity of alleged misconduct" compared to the other cases, Jason Bichsel , member of law firm McGlinchey Stafford , whose practice includes auto finance. The Leader complaint included “allegations of not just selling voluntary protection products without the consumer's express informed consent but essentially making it a company policy to avoid having the consumer understand what they were buying and destroying , or hiding records of their conduct,” Bichsel said. The extent of the alleged misconduct at Leader is likely why the settlement was so substantial, he said. FTC to remain active in auto The Leader and Lindsay cases are further evidence suggesting that the FTC is likely to continue filing enforcement actions , regardless of the new administration , or what happens to the FTC’s Combating Auto Retail Scams (CARS) Rule , McGlinchey Stafford ’s Bichsel said. The CARS rule aims to prohibit “ junk fees ” and “ bait-and-switch ” advertising in the car-buying process, along with other deceptive practices deemed unlawful by the FTC. Legal experts note that many aspects of the rule are already applied in actions against dealerships. “I wouldn't expect the FTC to abandon the case midstream when new leadership takes over,” Bichsel said. “I'm not convinced that the FTC is going to change its approach when it comes to the way that consumers are sold products that the agency is skeptical of their value. “Even if they do , the states are more than capable of bringing these actions themselves.” Auto Finance Summit East 2025 is set for May 12-14 at the JW Marriott Nashville featuring fireside chats with Santander Consumer USA and Chase Auto. Visit autofinance.live for more information. Click here to register for the event .

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