April 2013
Consumer Line
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CONSUMER PROTECTION

Curbsider Jailed


Curbsiders deal in cars - illegally. They buy and sell just like a registered dealer, but they’re not registered. Commonly their source of inventory is salvage auctions and many of the cars they sell are rebuilt wrecks. To avoid detection they often pose as private sellers; their true identity and the history of the vehicles they sell is usually not disclosed to a buyer. OMVIC investigates and prosecutes curbsiding vigorously, and as one Peel Region man recently found out, the penalties can be severe.

Andre N. Campbell of Mississauga was sentenced to 32 days in jail after being convicted on 16 counts of acting as a motor vehicle dealer without benefit of registration (curbsiding).

Evidence presented at sentencing showed Campbell had been convicted twice previously for curbsiding; in 2001 and 2004. The fines imposed for those convictions were never paid. In passing sentence the court agreed with the prosecution’s submission that incarceration was warranted in light of Campbell’s failure to pay past fines and the aggravating factor that the accident history of the vehicles sold was not disclosed to the buyers, one of whom was a driver education instructor who told Campbell the vehicle would be used by his students.

“This sentence sends an important message to curbsiders” stated OMVIC Director of Investigations Carey Smith. “Retail automotive sales is a regulated industry in Ontario, and these regulations exist to ensure a fair, safe and informed marketplace. OMVIC’s mandate is to ensure persons acting as dealers meet the requirements set out by law.”

Ambient Auto Center

INDUSTRY NEWS


Recent news reports have spotlighted an unethical practice; specifically as it relates to the way some dealers market and charge for products or services they have preinstalled on vehicles such as anti-theft products or nitrogen in tires. Some consumers have claimed dealers told them these were “mandatory” charges that must be paid. Here are a few questions related to this issue and OMVIC’s response:

  1. What mandatory fees are dealers required to charge? Dealers are required to charge HST and may seek reimbursement for the cost of licensing a vehicle on a customer’s behalf.
  2. Are products or services a dealer installs prior to sale such as anti-theft products or nitrogen in tires mandatory? Charging for these products is definitely NOT mandatory as set out in regulation or law, however a dealer may decide not to sell a vehicle unless the product/service they have installed is paid for. Should a dealer make that claim, the consumer now has the option to purchase or not. OMVIC’s recommendation would be for the consumer to only agree to pay for add-ons they believe have value and that they want to purchase. If the consumer doesn’t want the product or service, tell the dealer. If the dealer insists on charging for the product or service, the consumer should walk away and shop elsewhere, but do so before signing a contract. If a dealer suggested the charges for these products were mandated by the government or OMVIC, this would clearly be a false statement and they could face administrative action by OMVIC.
  3. It was reported that some dealers added the costs for these products after the consumer had negotiated a final price. Is that legal? There are two parts to this answer. Ontario has very strict regulations regarding dealer advertising; any advertisement that includes a price for a vehicle must be an all-in price. The price must include all fees and charges although HST and licensing may be excluded. Ontario dealers may NOT mandate any fees above the all-in price. Should a dealer try to do so, consumers should immediately walk out and contact OMVIC to report them.

    This issue may become murky when a consumer negotiates a price reduction and the dealer later adds additional charges on the contract. Technically, as long as the final price doesn’t exceed the advertised price, the dealer hasn’t breached the advertising requirements. Therefore, if a consumer enters into negotiations to reduce the price of a vehicle they should make it clear at that time they are negotiating the final drive-away price and they won’t consider any other charges other than HST and licensing. Any later attempt by the dealer to add fees could be seen as a breach of the Code of Ethics or the MVDA’s requirement to conduct business with honesty and integrity. This of course would not apply to a consumer’s decision to add optional services/products (e.g. extended warranty) later in the buying process.
  4. How can consumers protect themselves from these practices? Get educated! Do research. Don’t be pressured into making a quick decision! If a consumer has questions or concerns about any part of the purchasing process they should call OMVIC’s consumer inquiry line (1-800-943-6002x5105), but do this before signing a contract! It’s important to remember there is NO cooling-off period when buying a car. Contracts are legal binding agreements.

HAVE YOU HEARD?


Having a problem with an Ontario dealership? OMVIC’s Complaints department may be able to assist. OMVIC offers a free complaint handling service to help resolve disputes between consumer and dealers. To file a formal complaint against a dealership and utilize OMVIC’s services call 1-800-943-6002x5105 or email consumers@omvic.on.ca.

When filing a complaint it’s important to have all documentation related to the problem; it will be required by the complaint handler.

Consumers should be aware however that OMVIC cannot force a dealer to give money back or offer compensation. OMVIC is not the court and only a court can impose a solution.

Please remember, these services are only available when consumers purchase from a Registered Dealer.

EXTRAS
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OMVIC is the self-management organization of the motor vehicle dealer industry and administers the Motor Vehicle Dealers Act -- a public protection statute -- on behalf of the Ministry of Consumer Services. OMVIC's mandate is to maintain a fair and informed marketplace by ensuring registration of motor vehicle dealers and salespeople, regularly inspecting all of Ontario's 8,800 dealerships, maintaining a complaint line for consumers and conducting investigations. OMVIC also administers the Motor Vehicle Dealers Compensation Fund.