On April 2, 2026, the Federal Trade Commission (FTC) and Maryland Attorney General’s Office announced they had settled a lawsuit brought by the agencies against a dealer group based in Maryland for alleged deceptive advertising and selling practices in connection with the sale of new cars. The settlement is the latest development in a series of enforcement actions brought by the FTC, typically in conjunction with state attorneys general, to deter deceptive acts and practices in the automotive industry.

Ongoing Focus on “Junk Fees” and “Add-On” Products

In December 2024, the FTC and the Maryland Attorney General’s Office filed a complaint alleging that Lindsay Automotive Group used deceptive practices in advertising vehicle prices, misrepresenting financing options, and selling unwanted “add-on” products. The complaint named three dealerships owned by the group, along with the group’s president, chief operating officer, and the former general manager of the dealerships. According to the agencies, the dealer group touted low prices in its advertising but then charged customers additional fees and unwanted “add-ons” such as extra service plans, tire and rim protection, and “guaranteed asset protection” when customers  visited the dealerships.

The stipulated order filed by the parties prohibits the dealer group from using specific misrepresentations in connection with advertising and selling motor vehicles, including misrepresentations about the availability of vehicles at advertised prices and whether a particular source of financing is required. The order also requires the dealer group to “clearly and conspicuously” disclose the total amount a consumer must pay for a car, excluding only required government charges, and to obtain a consumer’s express consent before charging any fees. In addition, consumers who were charged by the dealer group a total of more than $75 million in connection with vehicle purchases between April 2020 and December 2025 will receive notice from the Maryland Attorney General’s Office that they may be eligible for a refund of certain fees and charges they paid the dealer group. The dealer group also agreed to pay a $3.1 million civil penalty to the state.

Enforcement Actions Echo Prior Rulemaking Effort

The terms of this most recent settlement follow in many ways the structure of the “Combating Auto Retail Scams” (CARS) Rule announced by the FTC in December 2023 but vacated by the U.S. Court of Appeals for the Fifth Circuit in January 2025. Among other things, the rule would have required dealers to make a clear upfront disclosure to consumers of a vehicle’s total price. Since the Fifth Circuit’s decision, the FTC has continued to focus on allegedly deceptive pricing practices in the auto industry, most recently issuing warning letters to 97 dealer groups covering more than 1,000 locations nationwide.

In a separate statement issued in conjuction with the Lindsay Automotive Group settlement, FTC Chairman Andrew Ferguson noted the FTC continues to lack the authority to obtain monetary relief for consumers in the wake of the U.S. Supreme Court’s 2021 decision in AMG Capital Management v. FTC and urged Congress to “enact legislation authorizing the FTC to obtain equitable monetary redress for consumer” as it did “with great success” before AMG Capital. In that case, the Supreme Court held that Section 13(b) of the FTC Act authorizes the FTC to seek only injunctive relief for violations of Section 5 of the FTC Act, rather than  to a specific FTC rule. Although it may be confined to injunctive relief, the FTC shows no signs of letting up on its enforcement efforts against allegedly deceptive practices in the automotive industry.