Remember the story I brought you a couple of weeks ago about the FTC cracking down on dealership advertising? Looks like they were not kidding!
Lindsay Automotive Group, based in Maryland, has agreed to pay a $3.1 million civil penalty and potentially more than $75 million in consumer restitution to resolve allegations that it misled car buyers with deceptive pricing and unauthorized add-on charges, federal and Maryland officials announced April 2.
The settlement, reached with the Federal Trade Commission and the Maryland Attorney General’s Office, stems from a lawsuit first filed in December 2024 and later amended in July 2025. Regulators alleged the dealership group advertised low vehicle prices but routinely charged customers more during the sales process.
“Lindsay Auto misled consumers by advertising false low car prices and then adding mandatory fees and other charges during the car buying process,”said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection.
The case names three dealerships as defendants: Lindsay Chevrolet of Woodbridge, Lindsay Chrysler-Dodge-Jeep-Ram in Manassas, Virginia, and Lindsay Ford in Wheaton, Maryland. Also named were Lindsay Management Co. President Michael Lindsay, Chief Operating Officer John Smallwood and former general manager Paul Smyth. All parties agreed to settle without admitting or denying wrongdoing.
In a statement, Lindsay Automotive said it chose to resolve the case to avoid prolonged litigation.
“We’re pleased to put this matter behind us. While we respectfully disagree with aspects of the FTC’s investigation — and believe it’s important to note there were no allegations of discrimination — we made the decision to settle rather than engage in a lengthy and costly legal process,” the company said in a prepared statement reported by Automotive News. It also questioned how regulators calculated potential restitution and said the conduct cited involved limited timeframes and specific stores, adding that its current operations emphasize transparency.
The settlement requires restitution for customers who purchased vehicles between April 1, 2020, and Dec. 31, 2025. Eligible consumers are to be reimbursed for the difference between the advertised price and the price paid, as well as for add-on products or services they did not agree to purchase or believed were mandatory. Maryland officials said total restitution could exceed $75 million.
According to the complaint, Lindsay’s practices affected a large share of buyers. Regulators said more than 88 percent of customers in a sampled group of transactions from April 2020 through March 2023 paid more than the advertised price on third-party sites such as CarGurus and Cars.com. Most of those consumers paid more than $2,000 above the advertised figure.
The lawsuit also alleged that Lindsay incorporated conditional rebates into advertised prices and falsely suggested those prices required financing through the dealership. A customer survey cited in the complaint found 38 percent of buyers were told they had to use Lindsay-arranged financing to qualify for advertised pricing, despite the company indicating to advertising partners that such pricing was not contingent on financing.
In addition, regulators alleged the dealerships added products such as service contracts without customer consent or misrepresented optional products as required. According to the complaint, 68 percent of customers charged for add-ons reported experiencing one of those scenarios.
Officials said the conduct violated both the FTC Act and the Maryland Consumer Protection Act.
“We filed this lawsuit because Lindsay dealerships misled Maryland car buyers into overpaying for their vehicles,” Maryland Attorney General Anthony Brown said in a statement. “This settlement puts money back in Marylanders’ pockets and puts a stop to these predatory practices.”
The case also highlights broader limits on the FTC’s enforcement authority following the AMG Capital Management v. FTC decision. In that ruling, the U.S. Supreme Court curtailed the FTC’s ability to obtain monetary relief under Section 5 of the FTC Act.
FTC Chairman Andrew Ferguson noted that constraint, emphasizing that Maryland — not the FTC — is administering the monetary recovery in this case.
“Even where, as here, the misconduct is egregious, the Commission has no authority to restore to consumers the money wrongfully taken from them,” Ferguson said, adding that congressional action would be required to restore that authority.
The settlement comes amid increased federal scrutiny of dealership advertising practices. In March, the FTC disclosed that it had sent warning letters to 97 dealership groups nationwide over suspected violations tied to pricing transparency and advertising tactics. The agency declined to identify the recipients and would not confirm whether Lindsay Automotive was among them.
Those warning letters outlined several practices regulators consider illegal, including advertising prices that exclude mandatory dealer fees, making prices contingent on financing or rebates not universally available, and promoting vehicles at prices lower than actual out-the-door costs.
As of April 2, according to Automotive News, the Lindsay dealerships’ websites promoted “all-in pricing” that includes freight and processing charges, along with messaging emphasizing transparency and honesty — changes that regulators say are consistent with evolving enforcement standards across the industry.
Car Pro note: The FTC and State of Maryland must have really had the goods on these guys. No dealership group facing a potential $75 million dollar penalty would state they “made the decision to settle rather than engage in a lengthy and costly legal process.” This case will cause a lot of shady dealerships to stop deceptive practices. I said on the air recently that the Feds were going to make an example out of some dealership. Here it is.
Editorial Use Only: DCStockPhotography/Shutterstock.com. FTC Headquarters, Washington, DC, 2025.