you know, I once posted on here about not being happy to let another volunteer parent about whom we knew nothing, ferry my Y3 DD to a school choir event, in bad weather, in the dark, in the rush hour, in winter - an hour each way on the motorway.
I was told IWBU and wrapping her in cotton wool and all sorts! I was laughed at for saying DH would be taking the afternoon off work to do it himself. I was told I was being daft because they were parents and would have their own DC in the car too. DH was pitied for having such a nagging wife (he was fully in agreement with my views BTW).
But I have seen how some people drive on the school run - on the phone, without correct use of lanes and indicators, with their own children incorrectly restrained. That's without wondering how well maintained some of their cars are.
YANBU OP, what you describe is illegal and reckless. That they lied to you is an outrage and in the event of an accident their insurance would probably have been voided because they were carrying more people than there were seatbelts for.
Even now my DC only travel with parents we know well, and the youngest one and his friends still use car seats. I also did not let any of mine sit in the front till they were 11 and in an adult belt.