FTC Investigates Illinois Auto Groups
Unfair, deceptive or discriminatory behavior are among the agency's concerns.
FTC is demanding deal jackets for all deals with add ons from Liberty Auto City.
Karolina Grabowska
Two Illinois automotive groups are under investigation for potentially unfair, deceptive or discriminatory behavior, according to the Federal Trade Commission.
The FTC hasn’t formally accused Liberty Auto City or Leader Automotive Group of anything but has been evaluating their operations for potential FTC Act and Equal Credit Opportunity Act violations since last year.
FTC commissioners for each case report they are exploring the groups’ “auto sales and lending practices" for unfair or deceptive practices or prohibited discrimination that “resulted in higher vehicle sales prices, periodic payments, ‘add-on’ charges, or other harm to consumers.”
Ira Levin of Burke, Warren, MacKay & Serritella is representing Leader Automotive in the matter. He reported in a statement to Automotive News that the company is working with the FTC to respond to all reasonable requests for information. He also affirmed the company regularly trains employees on sales processes and performs periodic audits.
The FCT has been investigating Leader Automotive of Libertyville, Ill. since at least April 12, 2022. However, the FTC first issued a civil investigative demand for records on April 1, 2019.
Liberty Automotive asked the FTC to drop its records demand or give the group more time to collect the documents. The request was rejected on June 12.
The FTC investigation of Chicago-based Leader, a subsidiary of Auto Canada, started in November. On Feb. 23, the FTC rejected Leader’s request for more time to produce records that the agency had demanded.
The FCT has asked both dealer groups to provide documents related to:
Customer complaints
Auto lenders and their share of Leader’s loans
F&I products or add-ons not provided and installed by the manufacturer
Costs, sales prices, bundling, cancellability, mandatory status and employee compensation
Costs related to preparing a vehicle, such as reconditioning, and whether they appear in advertised prices
The FTC asked Liberty for the items from April 1, 2019 and the date the dealership group completed the agency's request.
The FTC asked Leader to provide documents dating back to April 1, 2018. The agency also asked Leader to provide every unique dealership advertisement, and all means of obtaining reviews, including any entity paid for reviews. The FTC also demanded that Liberty supply all deal jackets, retail installment sales contracts and financial applications on deals with an add-on between April 1, 2019 and April 1, 2022.
Originally posted on Auto Dealer Today
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