Seven members of the high-profile Hamilton police ACTION team that polices downtown Hamilton have been arrested and five charged as part of a probe into falsified tickets.
The seven officers from ACTION team one — recognizable for their yellow vests and bicycles — have been on administrative leave for nine months. Seven are suspended with pay and five will appear in court on July 13.
Police Chief Glenn De Caire confirmed the arrests and charges at a Tuesday evening press conference. The investigation involved discrepancies with 32 tickets, he said.
The officers will answer to charges ranging from breach of trust to fabricating evidence next month, and Police Act charges will come at a later date.
The charges come after an extensive probe into the fake ticket allegations. “What was needed was a full, fair, and robust investigation,” De Caire said.
De Caire said the public should know that police are “absolutely committed” to investigating potential misconduct within the force.
“We will be guided by that evidence and we’re not afraid to follow that evidence wherever it takes us,” he said.
Detectives began an investigation when tickets were found in a service shredder box. The tickets in the books that should have to be given to the person being ticketed were still attached. The tickets were logged with the courts and counted as police statistics, but were never handed out.
The investigation included talking to some of the people named in the tickets, and all of those tickets have since been withdrawn, the chief said.
“The service will take every step possible to ensure that people named on the tickets are not negatively affected,” police said in a release.
De Caire said the charges do not reflect on the ACTION strategy, which is a five-year-old effort focused on curbing downtown crime.
The officers often work with marginalized populations, including people with addiction and mental health issues. De Caire said the team is still doing good work.
“The ACTION strategy itself is a very sound strategy, very effective in the city of Hamilton,” he said.
A 2014 report said the team has issued more than 23,000 offence notices since 2010. There are five ACTION teams, and each has seven constables and a sergeant.
These sorts of cases do damage public perception, said Clint Twolan, president of the Hamilton Police Association. He only heard of the charges third hand on Tuesday morning. But he doesn’t want it to hurt the image of police officers in general.
“(Officers) do the best with what they have,” he said. “I understand public perception and I understand why your opinion wouldn’t necessarily be a positive one based on what’s going on right now, but I don’t want people judging the rest of the Hamilton Police officers.”
The falsified ticket scandal is the latest in a series of embarrassing incidents for Hamilton Police Service.
In another high-profile case, Det. Const. Craig Ruthowsky, 41, remains behind bars awaiting a trial on several charges related to participating in a criminal organization.
Here is a list of the officers charged:
Const. Bhupesh Gulati, 31: conspiracy to commit an indictable offence, namely intent to mislead by fabricating provincial offences notes; four counts of fabricating evidence; four counts of breach of trust.
Const. Shawn Smith, 37: conspiracy to commit an indictable offence, eight counts of fabricating evidence, eight counts of breach of trust and obstructing police.
Const. Steve Travale, 40: conspiracy to commit an indictable offence, seven counts of fabricating evidence, seven counts of breach of trust.
Const. Staci Tyldesley, 29: conspiracy to commit an indictable offence, 10 counts of fabricating evidence, 10 counts of breach of trust.
Const. Dan Williams, 32: conspiracy to commit an indictable offence, two counts of fabricating evidence, two counts of breach of trust.
A B.C. couple are speaking out about how they feel they were misled into a 25 per cent vehicle loan from TD, which has left them paying more than double the price of their car.
“We’re paying $21,000 for the loan — then $23,000 in interest,” said Angie Hauser of Kelowna. “They’re making money off of people who have no money.”
“We’ve been robbed by a bank with the help of a car dealer. I mean, that’s the only way I see it,” said her husband Enzo Gamarra.
The Dodge Avenger the couple financed for $21,000 will end up costing them $44,000 if they don’t get a break on the loan. (CBC)
“Why would I want to pay $44,000 for a car that’s now only worth $15,000?”
Hauser and Gamarra are among a growing number of Canadians without adequate credit who are being signed up for subprime bank loans by car dealerships.
“I went in willingly to get the loan, because we needed a car. But, from what I was told and what I was promised when I went in — now I feel like I’ve been lied to,” said Hauser, who insists they were assured their interest rate could be lowered, substantially, after a year.
“It’s been more than 30 months. We never missed a payment, and we still have the same car and we still have the same high interest,” said Gamarra.
Banks in the business
Increasingly, Canada’s major banks are behind high-interest loans such as theirs. TD has become one of the bigger players in recent years, since acquiring car financing companies in Canada and the U.S.
Dealers typically take a cut when the financing is approved, by marking up the loan amount, or from referral fees paid by the lender.
TD says its auto finance division now has $14.3 billion in “indirect” loans brokered by dealers on its books, which is up three per cent over last year.
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That money was loaned to both regular and subprime borrowers, the latter being people who don’t have adequate credit ratings to qualify for regular financing.
“Subprime” became a household term after the economic crisis of 2008, which was partly caused by defaults on high-risk mortgages in the U.S.
Hauser and Gamarra declared bankruptcy in 2010 over credit card debt. The following year, they saw a sign at a Kelowna dealership offering financing for people with bad credit.
“We wanted to get a reliable car for our family,” said Hauser.
No other financing available
She manages a beauty supply company and her husband is a courier. They have a four-year-old daughter.
At the time they got the loan, they said, their car had broken down beyond repair.
According to the customers, Okanagan Chrysler assured them they could get refinancing at a much lower rate, if they made their payments for a year. (CBC)
They said they had no money saved for another car, but they needed one to get to work, so financing was their only option.
“I know it’s our fault we got into it, but it’s ridiculous. It’s like rich people getting rich off the poor,” said Hauser. “It’s a way to loan-shark, legally.”
They said Okanagan Chrysler Jeep Dodge sold them a 2010 Dodge Avenger, by promising them if they made their payments faithfully for a year, the dealer would then secure another TD loan, perhaps on a trade-in, at a much lower interest rate.
“We had to get the car they wanted … we didn’t even get to choose the car that we purchased,” said Hauser, despite their preference for a lower-priced model.
The sign outside the dealership advertises “No Problem” financing for people in bankruptcy. (CBC)
“We worked so hard to make these perfect payments so we could get refinanced.”
After a year, records show the couple went back to the dealership and directly to TD, asking for better terms.
They said they were shocked when they were told they still couldn’t get an affordable rate, because of their bankruptcy.
“How can you deny me refinancing when I’ve been in bankruptcy when you gave me a loan in bankruptcy? It doesn’t make sense,” said Hauser.
TD loans officer surprised
At first, Hauser said, the loan officer they met with at the local TD Canada Trust branch didn’t even believe the bank could charge 25 per cent interest.
“And then he went through the paperwork we had, and said ‘I can’t believe TD did a loan like this,’” she said.
The annual percentage rate charged on the TD loan, which includes all fees, is 25.44% over a seven-year term. (CBC)
TD Auto Finance then sent a letter denying their request for refinancing.
The couple also went to another dealership, asking for a trade-in and new financing. They said that dealer arranged another loan, also from TD, at 15 per cent interest, including the dealership’s cut.
The loan term was shorter, however, with higher monthly payments, so they couldn’t afford that either. That left them locked into the full term of the original 25 per cent loan — a total of seven years.
“It’s grocery money, it’s money for my daughter. It’s just so stressful I can’t even explain what it does to us,” said Hauser, in tears.
She said the payments eat up one-quarter of her take-home pay.
“We are talking about a big Canadian bank. And I mean for them to do that to us … that just makes me angry,” said Gamarra.
TD refused to discuss this case, citing privacy, even though the couple were willing to give their permission.
It also refused to answer Go Public’s questions when we asked how many subprime auto loans it has issued in recent years, how much money it makes from them — and how it justifies charging 25 per cent interest, particularly when there is a vehicle for collateral.
“TD Auto Finance offers a full spectrum of auto lending options, including non-prime loans in some markets,” said a statement from the bank.
“In Canada, we have a mature non-prime business … we have rigorous lending criteria and we only lend to those who fit within our risk appetite and satisfy thorough qualification criteria.”
According to Canadian Auto World magazine, subprime loans make up 25 to 40 per cent of all auto loans arranged by dealerships.
If 25 per cent of TD’s $14 billion in indirect auto loans are subprime, with roughly the same terms Hauser and Gamarra have, the bank would stand to make approximately half a billion dollars a year, in interest payments alone — if all of the customers made their payments.
“I mean, not even credit cards charge that much,” said Gamarra, who said the fact they’ve made all their payments should count for more.
Risk low to banks
According to the Canadian Auto Dealers Association, delinquencies on all auto loans are at an all-time low.
The industry attributes that partly to relatively low monthly payments, stretched over terms as long as eight years. That also means many people owe — and pay — much more than their cars are worth.
The Canadian Banker’s Association refused to answer questions about rates, but sent a statement also stressing that default levels are low.
Hugh MacKenzie, a Toronto-based economist and public policy consultant, says a 25 per cent interest rate is “predatory.” (CBC)
“Banks in Canada are prudent lenders, and manage risk carefully and make sure borrowers are properly qualified and can withstand economic fluctuations,” said CBA spokeswoman Kate Payne.
“Banks only lend to those who they believe can pay the money back, and the numbers back this up.”
“A 25 per cent interest rate is predatory,” said Hugh MacKenzie, a Toronto-based economist and public policy consultant.
“That’s a ridiculous interest rate to be paying, particularly for a car, because a car can be repossessed if you don’t make the payments.”
He said low default rates are another reason why the high interest isn’t justified.
MacKenzie is the former chair of the Atkinson Foundation, which promotes social justice. It recently funded research — and education for shareholders — about the Canadian banks’ involvement in the subprime lending industry.
An “issue brief” from that research said, “There are significant risks, particularly for banks, of being associated with subprime lending activities leading to negative public perceptions and increased distrust of these financial institutions.”
MacKenzie said Ottawa should step in to regulate the interest rates, especially given the finance minister’s expressed concern about record consumer debt levels.
“[The couple] would have gotten a cheaper loan if they had used Visa to buy the car. And yet people are complaining — and the federal government is expressing concern — about high credit card interest rates.”
Ottawa will ‘monitor’
The federal Finance Department sent a statement indicating the government is not considering any action.
“The government will continue to carefully monitor the types of financial products and services available to Canadians in the marketplace, including those related to vehicle financing,” said the statement.
In the meantime, auto sales in every Canadian province increased from 2012 to 2013. The industry is attributing some of that to subprime lending.
Since Go Public got involved in the Kelowna couple’s case, Hauser said the dealership has called several times and has offered them a new loan — for a new car — at 4.99 per cent interest.
Okanagan Chrysler’s general manager declined an interview, but in a statement he said he will do what he can.
“We are willing to work with this customer and the lender to see if their rate can be improved, and shall do so, but as we do not control the rates we can only do our best,” said Clayton Andres.
Hauser, meanwhile, thinks the subprime market needs closer regulation.
“I think that the government should regulate these loans or regulate these banks and watch what they are doing a little closely. Because the banks don’t even know what’s going on with their own loans,” said Hauser.
The report, released on Monday, looked at premiums set by the 10 largest auto insurance companies in 10 urban areas across the United States.
The CFA plugged information about a fictional person into each company’s website to get a quote, changing only education level and occupation to see the effect on rates. Five of the insurance companies were found to collect such information.
In some cases, premiums for minimum-liability coverage exceeded $2000 and in one instance, in Baltimore, it was more than $4000, from Travelers Insurance.
“The quoted prices, especially the nine exceeding $2000, show that insurers either are overcharging lower-income consumers or are not interested in serving them,” Bob Hunter, the CFA’s director of insurance, said in a statement.
Officials at Travelers were not immediately available to comment.
The report found that Geico, part of the Berkshire Hathaway group of companies, charges more in six of the analyzed markets for a factory worker with a high school diploma than for a factory supervisor with a college degree. The rate could be as much as 45 percent more in Seattle or as low as 20 percent more in Baltimore.
Progressive Corp., which had the second-highest difference in premiums, was found to charge the factory worker 33 percent more in Baltimore and 8 percent more in Oakland, California.
Since education and occupation have been found to correlate with race, the CFA said the practice of using such factors is discriminatory.
However, Robert Hartwig, an economist and president of the Insurance Information Institute, an industry group representing insurance companies, said dozens of factors go into determining insurance rates, each correlating with risk.
“Why would an insurer collect data that is not useful?” Hartwig asked. “These factors are used for one reason and one reason only, and that’s to ascertain risk.”
Common practices that the CFA agreed should be used for setting rates include a person’s past driving record and miles driven. Location and type of car are also often used because they can increase the cost of a claim.
Factors such as age, gender and credit ratings are also used because they have been found to correlate with the frequency or size of claims, according to the III’s website.
But the CFA said that while such factors may indicate correlation, they do not necessarily indicate causation.
Hartwig defended the use of correlation, saying it was what insurers and actuaries typically use because causation might never be known.
Hartwig also said the use of so many different models was a sign of a competitive market. A market in which all companies used the same variables would result in uniform pricing, he said.
Using a survey conducted by market research firm ORC International, the CFA said about two-thirds of Americans think the use of education and occupation to set insurance rates is unfair.
The organization said the Federal Insurance Office, an agency born out of the 2010 Dodd-Frank financial regulatory reform law, might be able to change how insurers determine rates.
Insurance regulation is usually at the state level. But Stephen Brobeck, executive director at the CFA, suggested it is not a big enough concern for state officials and said he hoped attention from consumer advocacy groups would change that.
“Many of the insurance commissioners and the departments are not sensitive enough to the needs of the insured, particularly for low- and moderate-income drivers in their states,” Brobeck said on a conference call.
He added that the CFA also opposes the use of credit ratings because it discriminates against low-income earners.
Auto insurance is required to own and operate a vehicle in all U.S. states except New Hampshire.
It’s the clause that has no claws, yet many landlords still use it, and many prospective tenants still fear it.
The infamous “no pets allowed” line is frequently inserted into lease agreements, sending many animal-owning apartment seekers scattering.
However, what some do not know is that the clause is void in Ontario. And it’s not the only one.
Does your lease say you can’t have overnight guests? Void. Obligated to pay a damage deposit? Void.
Due to a general lack of awareness on the parts of both landlords and tenants on how to bring a lease in line with Ontario’s Residential Tenancies Act, with all its rules that govern living arrangements, the Federation of Metro Tenants’ Associations (FMTA) has come up with what it believes to be a solution.
This fall, the FMTA will roll out its version of a standardized lease agreement, an 11-page document they want all landlords in Ontario to use. Similar templates exist in other jurisdictions, including parts of Australia.
The standardized lease would lay out the rights and responsibilities of each party as stipulated by the tenancies act, as well as room for negotiating charges and services provided, such as electricity bills or parking fees. In other words, “clauses that are not void,” said Anita Agrawal, the FMTA’s vice-chair.
“Our first priority is to propose it and have it legislated, and then to give tenants the ability to better negotiate with their landlord,” she said.
The FMTA’s board is currently working on a promotional campaign for their “fair lease” concept and approaching MPPs.
But on the government end, it seems there is little interest in the idea.
“Considering the unique nature of each tenancy agreement in Ontario, we believe landlords and tenants should have the flexibility to decide how best to determine the lease agreement,” said Richard Stromberg, a spokesman for the Ministry of Municipal Affairs and Housing.
The concept of a standardized lease partly stems from the numerous phone calls fielded by the FMTA’s hotline from tenants questioning certain sections of their lease.
“When one of (the void) clauses appears, we tell tenants they don’t even have to debate it. They can tell the landlord or can go straight to the Landlord and Tenant Board,” said Geordie Dent, the FMTA’s executive director.
Daryl Chong, president of the Greater Toronto Apartment Association, which represents owners of multi-unit residences, said the tenancies act “already acts as a kind of standardized lease” as landlords must follow it.
At the Ontario Landlords Association, which acts on behalf of small residential landlords, spokesperson Liz Dong said the association does its best to educate its members on how to properly draft leases.
Should there be a greater push for a standardized lease in the near future, Dong said “it will require all stakeholders to create it,” mentioning tenant groups, “huge corporate landlords,” and landlords of small- and medium-sized buildings.
Top 5 most commonly reported void clauses in leases
• No pets allowed
• Requiring a tenant to pay a damage deposit
• No overnight guests
• Requiring a tenant to get contents insurance
• No subletting
Limits Set On Guideline Rent Increases
On Wednesday June 13, 2012 the government of Ontario passed legislation that amended the Residential Tenancies Actas it relates to guideline rent increases. Previous to this amendment the guideline increase was set by the Consumer Price Index (CPI) and would go as high as the index allowed. Now the guideline increase is still set by the CPI but it is capped at 2.5 percent. This means that if the CPI exceeds 2.5 percent you will only receive an increase of 2.5 percent. Now the guideline is limited between 0-2.5 percent, no more, no less.
An Ontario court has slapped a former Mazda auto dealership in Orangeville with $10,000 in penalties after the store pleaded guilty to committing “an unconscionable representation” by selling a car to a woman for more than $25,000 above its real value.
A judge with the Ontario Court of Justice fined Orangeville Mazda $8,000 plus about $2,000 in victim compensation costs on Friday following entry of a guilty plea by a dealership lawyer to the charge under the Consumer Protection Act.
Orangeville Mazda and two employees faced charges of “engaging in unfair practice by making an unconscionable representation,” in March 2010 after an investigation by the Ontario Motor Vehicle Industry Council, which regulates new and used car dealers.
Sale documents showed the dealership had sold an unemployed woman living on a disability pension a 2010 Mazda sedan for about $66,000 including taxes and a trade-in car. But the probe found she should have paid less than $41,000.
The council’s investigation indicated the dealership under president Sunny Bains approved a seven-year loan with a final payment of more than $7,000 when the woman did not qualify because of her personal financial status. Furthermore, the dealership sold several extra products and services for more than double normal prices.
Mazda Canada quickly terminated the dealership’s sales and service agreement for breaching the automaker’s business practices in the deal and other incidents. The move effectively shut down the store’s operations. Mazda also unwound the deal with the woman and compensated her.
The province’s Licence Appeal Tribunal revoked the dealership’s registration. In addition, the tribunal suspended the registration of the two senior store employees.
Charges against the dealership’s manager Mohammed (Moe) Shaikh and employee Kien Trung at the time remain before the courts.