Auto group running Peoria, McLean County dealerships agrees to pay $20M to settle fraud claims

CHICAGO (25News Now) – Customers who bought cars at Autohaus of Peoria, or the Bloomington-Normal Auto Mall could be eligible for part of a proposed $20 million settlement over consumer fraud allegations.

Illinois Attorney General Kwame Raoul and the Federal Trade Commission on Friday announced a proposed settlement with Leader Automotive Group and its parent company AutoCanada.

The lawsuit filed by Raoul’s office and the FTC claimed the dealerships used “bait-and-switch” tactics by advertising low prices and then charging customers for expensive add-ons without their consent. Salespeople falsely told customers the add-ons were required despite not being included in the advertised price of the cars.

According to a release, the dealers also bolstered their poor reputations by posting fake reviews.

Leader operates more than a dozen dealerships in the state. Locally, Leader operates Autohaus Motors, which includes Mercedes-Benz of Peoria, Porsche Peoria, Volkswagen of Peoria, and Audi Peoria.

Leader also runs 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.

“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 in a prepared statement.

“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 statement. “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 addition to paying $20 million to refund harmed consumers, the proposed settlement would require all Leader dealerships in Illinois to make clear disclosures of a car’s offering price, which is the actual price any consumer can pay to buy the car, excluding only required government charges.

The settlement also requires the companies to receive consent from buyers for add-on product charges, the release said.

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