Taking Advantage of Consumers

Update: See prior post

See the story from the Toronto Star:

It was late December, 2009 when Ms. Madeline Leonard went to Mazda of Orangeville to replace the tires on her 2004 Mazda3. She had no intention of purchasing a vehicle.

Ms. Madeline Leonard, is 56 years old, who is intellectually disabled and draws a monthly disability pension (less than $2,000) and who lives in a small subsidized apartment; was convinced by salespeople at the Mazda Orangeville dealership, to trade in her 2004 Mazda3 towards the purchase their “used” demonstrator model, with about 6,000 kilometres already on the odometer.

Mazda of Orangeville sold Ms. Madeline Leonard a black 2010 Mazda6 sedan at the incredible price of almost $66,000, after taxes and the value of her trade-in vehicle.

Mazda Canada lists the base price of this new Mazda6 sedan at $39,969 on its national website, but the dealership allegedly posted a sticker of $45,846 on the car.

Ms. Madeline Leonard described the salesman at the dealership as “slick” and the process mesmerized her. But after signing a contract and driving the vehicle away, she checked prices at other Mazda outlets.

“The differences were shocking,” she said. “I felt very disappointed how I was treated.”

In response to Ms. Leonard’s investigation and her findings, she complained.

The Ontario Motor Vehicle Industry Council, which regulates new and used car dealers, took action after she complained. Its investigation found she should have paid about $41,000 for the vehicle — which wasn’t even new.

“In my eight years here, I haven’t seen a case like this,” said Carey Smith, the regulator’s director of investigations. “The deal was way over the top regarding pricing.”

Smith said the salesmen also billed Leonard, who is intellectually disabled, about $4,500 for a “protection package” that included fabric guarding, rust and sound proofing and window etching. Other dealers charge about a third of that for the same items, he said.

Mazda Orangeville, that’s no way to treat a lady!

Smith has charged Mazda of Orangeville and two senior employees with breaching Ontario legislation that protects consumers. The dealership could face a fine of up to $250,000 if found guilty.

The regulator charged the dealership; Trung, 38, of Vaughan; and sales manager Mohammed (Moe) Shaikh, 46, of Mississauga with “engaging in unfair practice by making an unconscionable representation,” contrary to the Provincial Consumer Protection Act.

Trung said the defendants will plead not guilty when they appear in court this month.

Under the act, the employees could receive fines up to $100,000 each and/or two years less a day in jail if found guilty. The defendants could also be liable for damages to Leonard.

The regulator could also revoke the registrations of the dealership and salespeople involved.

Mazda of Orangeville has also popped up on the radar screen of the Better Business Bureau (even though Mazda Orangeville is understandably not a member) and the BBB has given it a D+ rating on a scale from A+ to F, since January 2008.

Salespeople wishing to make a quick buck should never take advantage of the vulnerable or the disadvantaged. If they do, however, in Ontario, they should know that there is legislation that protects these individuals from predators.

Here is a list of basic Consumer Rights, which every consumer in Ontario should know.

It should be noted that the Auditor General of Ontario, Jim McCarter noted in his 2009 Annual Report that Ontario’s Ministry of Consumer Services isn’t doing enough to attract the confidence of consumers and found that most consumers in Ontario don’t make enough inquiries or complaints and will most likely go elsewhere to deal with consumer issues, versus the Ontario Ministry of Consumer Services. The Auditor General found that the Ministry had hired four (4) or fewer inspectors to investigate problems businesses brought to their attention and that the Ministry has one (1) inspector for every 100,000 businesses. He noted that in 2008/2009 that the Ministry had not made one (1) proactive visit to business types in the Top Ten (10) Complaint List.

If you want to access the Ministry of Consumer Services “Consumer Beware List” click onto this link. If you want to check out companies on the Better Business Bureau, click onto this link.

Update: May 14, 2010 – Mazda Canada has terminated a dealership in Orangeville for breaching the company’s business practices including an incident where the store sold a car to a woman for more than $25,000 above its real value. See story.

Update: How to Win Your Consumer Complaint
November 11, 2010 – Follow six (6) easy steps: 1. Be polite but persistent, 2. Ask to speak to a manager, 3. Propose a solution, 4. Be respectful, 5. Speak to retention, 6. Keep notes.

Update: January 5, 2011 – Sue Keefe is one of eight people who filed a complaint against National Benefit Authority to the Better Business Bureau in 2010. She agreed to give the company a 25 per cent share, plus HST, of her retroactive disability tax credits, not realizing it was a service H&R Block offers for just $27. This Agency charged woman $10,000 for tax claim she could have filed for free

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One thoughtful comment

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