Promising changes, Alberta minister calls car sales regulation a 'gong show'
Jon Woodward, W5
Published Monday, March 20, 2017 7:00AM EDT
Widespread, dodgy car sales tactics profiled by a W5 hidden camera investigation are part of a system-wide problem with the industry and proof the regulator needs to improve, says the Alberta minister responsible for overseeing changes.
Stephanie McLean says she’s concerned that a hidden camera survey of car dealerships found a majority failed to follow Alberta consumer protection law. She told W5 she has been revamping the agency that’s supposed to enforce those rules.
“It’s a gong show. You can quote me on that,” said the Service Alberta minister. “But I am working hard and I want Albertans to know my number one priority is to have their backs. We’re finally on the right track.”
Consumer watchdog group the Automobile Protection Association tested 20 dealerships in the Calgary area. Seventeen out of 20 failed, and of those that failed, 11 were repeat offenders.
The violations included hundreds of dollars in unadvertised fees – illegal under Alberta’s Fair Trading Act – and representing certain cars as new, even though they had been driven for thousands of kilometers.
In one case, the dealer actually invoked the name of the regulator itself, the Alberta Motor Vehicle Industry Council (AMVIC), when justifying an extra fee.
W5’s hidden cameras recorded a salesperson in a dealership in Calgary trying to charge a $686 “documentation and AMVIC” fee.
“I think they don’t care because there is a perception there are no consequences, and that’s a problem,” said George Iny of the consumer watchdog group, the Automobile Protection Association.
AMVIC does charge a fee for every car sold, but it has to be included in the price of the vehicle. And the fee isn’t hundreds of dollars – it’s just $6.25.
“Dealers will bundle that with their own personal charges and, in one case, actually saying it was over six hundred dollars,” said Iny. In reality, 99 per cent of that fee ends up with the dealer, he said.
AMVIC’s interim president, Doug Lagore, said hidden camera footage of the incident where AMVIC’s name was used to justify hundreds in additional fees wouldn’t guarantee an investigation.
“I doubt it. We might, we’d have to look at the circumstances,” he said. “Without a specific complaint there’s nothing I can do about it.”
AMVIC itself has a “checkered background,” according to a recent government review. The organization has been through 7 government reviews in 17 years. In December, the president of the organization was fired, and the review recommended changing the governance of the board.
Of the 13 directors on the AMVIC board, a majority of 7 seats represent the industry and a minority of six seats represent the public. However, all industry seats have been filled, while just two public seats are occupied.
One of those public members is a retired car dealer whose father was also a board member on the industry side.
“The AMVIC board is very weak unfortunately. The consumer representation is not really robust,” said Iny.
Alberta news reports say former Progressive Conservative Service Alberta Minister Manmeet Bhullar was criticized for appointing a personal friend and two law school classmates. Those seats are now empty.
The NDP turfed the PC government in the 2015 Alberta election. The NDP minister, Stephanie McLean, told W5 she plans to make the number of public seats on the board equal to the number of industry seats to better represent consumers.
The government review recommended changing the board to have 6 representatives from industry and 6 from the public. The review also recommended changing the structure of the agency's investigations to avoid conflicts of interests that could result in botched probes.
McLean said she is also actively advertising new board positions from the public and encouraged Albertans to apply.
“We significantly strengthened the conflict of interest position. Neither you nor your family members can be beneficiaries of the automotive industry,” she said.
“We’ve very much tightened up and broadened what a conflict of interest is for the public members.”
With files from Stephen Grant and Madeline McNair