THE DEALER BULLETIN
MARCH 2010 OFF THE LOT – AN INVESTIGATION BY CTV AND THE
AUTOMOBILE PROTECTION ASSOCIATION
On Saturday, March 6th CTV’s W-Five broadcast “Off the Lot”, a segment reporting the
findings of the Automobile Protection Association’s annual survey of the industry,
specifically used car dealers and curbsiders. The APA surveyed car dealers in
Vancouver and Toronto.
Link to story:
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20100305/w5_APAautos_100306/
20100306?s_name=W5
Link to OMVIC’s news release:
http://www.marketwire.com/press-release/Ontario-Motor-Vehicle-Industry-Council-APAStudy-Shines-Spotlight-on-Shady-Practices-1127716.htm
In Toronto, the APA study was based on visits to 16 dealers who were selected due to
questionable advertising which appeared in local papers or online. According to the
APA, 15 of the 16 dealers received a failing grade.
These results may raise concerns about Ontario’s dealers and the role OMVIC plays.
Below you will find answers to some questions you may have had following the
broadcast.
Any other questions or comments can be sent to omvic@omvic.on.ca, or by fax to 416512-3757. What did you think of the program? What do you think of the conduct of the
dealers shown? We’d like to hear from you.
How does OMVIC react to the fact that 15 out of 16 dealers failed?
The APA’s criteria for failure included failure to properly disclose damage, the charging
of hidden fees, or not permitting the vehicle to leave the property for an independent
inspection.
The decision to allow a vehicle to be subject to an off-site inspection is a business
decision the dealer makes and not subject to penalty or oversight by OMVIC. In some
cases dealers may be reluctant to permit a vehicle to be inspected off-site due to
concerns about possible damage to the vehicle by ill-trained and unsupervised backyard
mechanics. In our books, this would not constitute a failure. Nonetheless, OMVIC
encourages dealers to be open to permitting potential purchasers to inspect vehicles.
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The new MVDA, introduced on January 1, 2010, requires dealers to include all
mandatory fees in the advertised price. OMVIC is reviewing these and other dealers’ ads
to ensure compliance with the new rules. Prior to the new MVDA, charging of fees above
the advertised price may not have been illegal but in some cases the amounts being
charged could be considered an unethical practice. Recognizing that in some cases the
practice of charging additional fees had gotten out of hand, the Ministry of Consumer
Services addressed the issue in the new MVDA by imposing an all-in price requirement.
Under both the previous and new MVDA, if a dealer deliberately and knowingly fails to
disclose material facts about a vehicle, however, that dealer may be subject to
disciplinary action, charges or even revocation of its registration.
Link to written LAT decisions:
http://www.omvic.on.ca/info/enforcement/lat_decision.htm
What's OMVIC going to do with the information collected through the APA’s
investigation?
All of the dealers highlighted by the APA have been recently inspected and, have now
been re-inspected. Where warranted, OMVIC will take administrative action which may
include a caution, disciplinary action or the issuance of a proposal to revoke registration.
In some circumstances, charges may also be laid.
What is OMVIC doing about curbsiders, including the ones visited by the APA?
OMVIC takes curbsiding very seriously -- our investigations yield more charges than any
other jurisdiction in Canada. Last year, approximately 150 were charged. In one notable
case, the curbsider was sentenced to a year in jail. In addition to investigating
complaints, our investigators devote significant time to identifying and charging
curbsiders by monitoring purchasers at the public auctions and monitoring vehicles
imported from outside Ontario.
OMVIC has dispatched investigators to each of the alleged curbsiders identified in the
APA study and will take appropriate action. In two of the five instances, it appears the
vehicles were actually being offered for sale by salespeople of a registered dealer. This
is also a violation which could result in charges being laid for off-premises selling.
OMVIC aggressively investigates any curbsiding that comes to our attention, and we
take appropriate action in every single case.
Curbsider activity can be reported to OMVIC through the curber hotline: 1-888NOCURBS, or by email at nocurbs@omvic.on.ca.
How can OMVIC promote "Buy with Confidence" with the APA’s failure rate?
The vast majority of automobile dealerships and salespeople are honest and fair people.
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There are about 1.4 million cars, truck and motorcycles sold every year through Ontario’s 8,200
registered dealers. Out of those, we receive about 30,000 inquiries of which roughly 1,200 result
in a complaint file being opened. Most are resolved easily and quickly. A small number of files
result in administrative action by OMVIC.
As the APA study points out, curbsiders victimize purchasers who then have little recourse. In a
transaction with a registered dealer, purchasers have the force of Ontario’s extensive consumer
protection legislation. Purchasers can buy with a much greater degree of confidence when
purchasing from a registered dealer.
Is OMVIC going to charge these dealers?
OMVIC has already conducted inspections of all dealers in the study and appropriate
action will be taken if the law has been broken.
How many inspections does OMVIC do?
OMVIC conducts over 2,000 inspections each year. Inspections may result in follow-up
action including the possibility of charges being laid, imposition of conditions of
registration and even revocation of registration. Among other things, an inspection
includes a review of online and print ads, books and records, accounts, employee lists,
research and documentation on incoming vehicles and the disclosure on outgoing sales.
Follow-up with customers may also occur.
What is OMVIC’s role?
OMVIC licenses and regulates motor vehicle dealers in Ontario and enforces the Motor
Vehicle Dealers Act on behalf of the Minister of Consumer Services. OMVIC's mandate
is to maintain a fair, safe and informed marketplace by ensuring registration of dealers
and salespersons, inspecting dealerships, maintaining a complaint line for consumers,
conducting investigations and enforcing the Act and its associated rules and
regulations. OMVIC is also responsible for administering the Motor Vehicle Dealers
Compensation Fund on behalf of a Board of Trustees.
Contacting OMVIC:
1-800-943-6002
omvic@omvic.on.ca
www.omvic.on.ca
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