Impact Newsletter Q3 2009

A publication of the:
F A L L
2 0 0 9
A newsletter for Alberta motor industry’s licensed businesses and registered salespeople.
Excessive charges
for shop supplies
The new board
Board of directors changes at AGM in June.
AMVIC recently received several complaints
about the charge for shop supplies being
unreasonably high on repair orders.
AMVIC’s staff and members extend a sincere thank
you to the outgoing and incoming volunteer directors
for their past and future service.
Who’s new:
AMVIC members elected Donald Dixon, Transportation Lease Systems
Inc., Calgary, as the salesperson representative, replacing Mark
Krassman of Medicine Hat. Mark served on the board for two years.
The Auction Association of Alberta appointed Wade Michener,
owner of Michener Allen Auction, Calgary, as its representative.
Wade is replacing Wayne Orsten from Calgary, who has served the
board for four years and chaired the board for the past year.
The Recreational Vehicle Dealers of Alberta elected Douglas
Pinney of R.V. Country Services in Edmonton as their new
representative. Douglas is replacing Ross Hodgins, from Morinville.
Ross served on the board for two years.
AMVIC elected two new industry-at-large designates - Ed Wiersma
from Allwest Auto Parts in Edmonton to represent recyclers and
dismantlers and Nancy Suranyi from Namao Automotive Repair
Ltd., Namao. Ed and Nancy respectively
replace Aileen Gibb from Hillspring and
Randy Montgomery from Grande Prairie
who have served on the board for two
and four years.
/See "AMVIC's new board of directors” on page 3
P U B L I S H ED BY:
Alberta Motor Vehicle Industry Council
Brian Heninger
EXECUTIVE:
Impact! is the official publication
of AMVIC. Comments or mailing
address changes should be sent to
the publisher. Impact! welcomes
articles about the motor vehicle
industry and its people. Letters to
the Editor are welcome.
E D I T I N G & DESIGN:
LINK PR INCORPORATED 9249 - 48 Street, Edmonton, AB T6C 2R9
Tel: 780.448.0936 Fax: 780.465.6201 Email: [email protected]
If a shop performs 20 repairs a day, representing 40 hours of billed
labour at $100 per hour and charges 10% for shop supplies, that
translates to $400 a day or $8,000 a month. Many shops are now
charging 13% or 14% for shop supplies and it appears that in many
instances, there is no longer a cap.
Telling a customer that the charge is to cover the costs on shop
supplies is not truthful – it is adding on much more than just the
cost of shop supplies.
A shop supply charge should not surprise customers. All estimates
should include the charge and if a repair facility does not include
it in the estimate, then it should not be on the bill. A shop supply
charge must be a true reflection of the materials used.
Comment or questions? Contact:
Bob Hamilton, Executive Director, AMVIC
E: [email protected] T: 780.462.0860.
2 0 0 9 / 2 0 1 0 B OA R D O F D I R E C TO R S :
#303, 9945 - 50 Street, Edmonton, AB T6A 0L4
Tel: 780.466.1140
Fax: 780.462.0633
Email: [email protected] www.amvic.org
Toll Free Numbers: Licensing: 1.877.979.8100
Investigations: 1.877.279.8200
Return undeliverable mail to the above.
Bob Hamilton, Executive Director
Shannon DeLorey, Manager of Licensing & Finance
Bob Knight, Manager of Investigations
Janet Tancsics, Secretary to the Board
The industry seems to have gravitated to adding a percentage charge
based on the labour rate and usually caps the amount for shop
supplies at $25. It appears that some repair facilities are turning the
shop supply add-on into a profit center.
MOTOR DEALERs' Association, Calgary
Chairperson of the Board
SALESPERSON, CALGARY
Industry-at-Large, Onoway
Service & Repair Association, Edmonton
AUCTION association, Calgary
Donald Dixon
Dale Johnson
Peter Lokstadt
Wade Michener
The add-on for shop supplies started many
years ago as an attempt to simplify repair
orders. Rather than charging for small items
that are used as part of the repair process, such as topping-up the
windshield washer fluid, hand towels, seat covers or various cleaners,
a small amount was added to cover those items. Historically, the
amounts were small and did not attract much attention.
Robert Pelz
Douglas Pinney
Nancy Suranyi
Gary Walsh
Bart West
Ed Wiersma
Used Vehicle Sales, Red deer
Recreational vehicle Dealers, edmonton
Industry-at-Large, Namao
Public Appointee, Calgary
Public Appointee, Edmonton
Recyclers & Dismantlers, Edmonton
I m pac t ! A Publication of the ALBERTA Motor vehicle industry council
tigations Update
Whose deposit is it?
Recently AMVIC has received a number of consumer complaints regarding
transactions involving the purchases of vehicles via the telephone. Consumers
were encouraged to place deposits on vehicles to hold them until they are able
to finalize the deal. At this point, neither party signed anything that would enter
them into a contract. For various reasons, the consumer later decides to cancel the
transaction and the dealer does not return the deposit.
As there are no signed documents to commit the consumer to a contract, the
dealer must return the deposit in full. The only way the dealer could hold the
deposit would be if they had entered into a contract with the consumer. To do
so, the dealer should have obtained some signed documents by fax or scanning
it to an email. Provincial civil court comments and decisions have stipulated that
it is unlawful for a dealer to profit from deposits when they have erred or cannot
account for legitimate expenses.
Is an out-of-province inspection facility
liable for repairs?
A consumer purchased a vehicle relying upon information from recently completed
Out of Province (OOP) inspection. Shortly after taking delivery of the vehicle, it
broke down and required extensive repairs to bring it up to the Alberta safety
standard. AMVIC and Alberta Infrastructure and Transportation Safety Branch
conducted a joint investigation and deemed that the OOP inspection facility erred
in the inspection.
AMVIC held the inspection facility responsible for all safety repairs to the vehicle
that it should have seen in the original inspection. Alberta Transportation
suspended the facility’s ability to conduct further inspections for a short period.
Other sanctions could have resulted depending upon the circumstances such
as criminal charges under the Fair Trading Act or Criminal Code. Administrative
sanctions could have taken place by both agencies suspending or cancelling the
facility’s ability to operate as well. Due to being government specified inspections,
OOP and salvage inspections are held to a higher degree of accountability. AMVIC
and partner agencies, working closely together, are holding facilities that conduct
these inspections more accountable.
Year-end Investigation Statistics
April - July 2009
Complaint Statistics (number of calls)
New purchases
64
Used purchases
321
Repairs and service
140
Information and advice
2,176
Investigation Statistics
Total Fair Trading Act charges laid
13
Total Criminal Code fraud charges laid 0
Total Traffic Safety Act charges laid
2
Open investigation files
525
Closed investigation files
576
Total arbitration by investigators $670,880
Fines and restitution by the courts $1,000
Buyer beware:
If it is too good to be true,
it most likely is!
Recently while doing some research, an AMVIC
investigator came across an advertisement
for an absolutely gorgeous 2004 745 LI BMW.
The photographs showed a very clean car that
looked in condition. What a deal!
However, in the mind of the investigator, red
flags went up immediately.
The background in the picture did not
look like any place in Canada

The price was too good to be true – only
$8,500 as opposed to the regular retail
price of approximately $30,000.

There was no direct e-mail address, no
phone number, and no name to contact
in the ad.

The investigator sent an email generated
by the website asking about the car. A
return email came back with a story about
a sick family member and that the car
could not be viewed because it was not in
Alberta. However, in the fine print the ad
indicated the seller’s location being in a
small town outside of Edmonton.

As soon as interest was expressed to
purchase the vehicle, the seller explained
EXACTLY how the transaction would
proceed.

Furthermore, he indicated there would
be transfers, approvals and a five-day
exchange. He would ship the vehicle in a
container and even provided the name of
a shipping company.

The investigator asked for the Vehicle
Identification Number (VIN) and the seller
supplied one. However, in researching
this number, the investigator discovered
that the vehicle was registered in Florida
and the colour was grey, not the beautiful
white indicated in the photographs.
This definitely was not a terrific deal and likely
a selling scam. Before purchasing a vehicle via
the Internet, consumers should do their due
diligence and research it. Search the names
of companies named in the advertisements
— suprising information can be discovered.
For more information on how to identify a
vehicle sale scam, check out: blogs.cars.com/
safe/2007/02/how_to_pick_an_.html

FALL 2009
“Cash for Clunkers”
Is it MISLEADING advertising?
On August 21, AMVIC issued a caution
about using the phrase “Cash for
Clunkers” in advertising, citing that it
was deceptive and misleading. Later the
same day, Chrysler Canada and Hyundai
Canada announced a program offering a
rebate using those words. Ford Canada
has also now announced a rebate
program titled “Retire Your Ride” .
The initial concern was that consumers
could be confused – thinking that the
American “Cash for Clunkers” program
that offered government money was
now in Canada. The possibility for that
confusion still exists.
The Automotive Business Regulation states
that: “(2) A business operator must
ensure that every advertisement for an
automotive business that promotes the
use or purchase of goods or services (k)
does not offer a guaranteed trade-in
allowance for any vehicle regardless of
make, year or condition,” Thus, these
programs have to be used very carefully.
The dollars that are being advertised are
in reality a manufacturer rebate with a
new name.
There are three guiding principles to
determine if advertising is compliant:
1. Is it truthful?
2. Is it misleading in any way?
3. Does it fully disclose details of any
offer?
If using words like “Cash for Clunkers,”
make sure that consumers are not
misled in any way to think that there
is government money being directed
towards them. The only government
money is the $300 for the “Retire your
Ride” program that has been in effect for
several years.
AVMIC's new board of directors /continued from cover
Donald Dixon
Industry-at-Large - Salesperson
Calgary
Wade Michener
Auctioneer’s Association
Calgary
Gary Walsh
Public Appointee
Calgary
Brian Heninger (Chairperson)
Motor Dealers’ Association of Alberta
Calgary
Robert Pelz
Industry-at-Large - Used
Red Deer
Bart West (Secretary)
Public Appointee
Edmonton
Dale Johnson
Industry-at-Large
Onoway
Douglas Pinney
Recreational Vehicle Dealer
Edmonton
Peter Lokstadt (Treasurer)
Auto Service & Repair
Edmonton
Nancy Suranyi
Industry-at-Large
Namao
Ed Wiersma
Industry-at-Large - Recycler &
Dismantler
Edmonton
Change in
RV safety
certification
For decades, the Traffic Safety Act,
Vehicle Equipment Regulation has
stipulated that any RV driven or
operated in Alberta must be certified as
a Canadian Standards Association (CSA)
unit. This was not an issue for dealers
when most of the manufacturing was
Canadian based. However, it became
a problem in the last few years, as the
majority of the RVs sold in Alberta are
now built in the United States. U.S.
manufacturers typically build their
units to comply with an U.S. standard
that is very similar to the CSA but
not identical. The Alberta (and most
other provinces) requirement for CSA
caused the manufacturers to modify
their production. This put the Alberta
dealers at a disadvantage as the CSA
requirement added cost to the units. It
also meant that the Alberta consumers
had to pay a higher price and that
Alberta dealers were limited to only
CSA inventory from the manufacturer.
As there was no enforcement of this
regulation, consumers could buy a
non-CSA unit in another jurisdiction
and operate it in Alberta, ultimately
defeating the need for a safety
regulation.
The RVDA and AMVIC met with Alberta
Transportation on numerous occasions
over the last few years and suggested
that an addition to the regulation to
include both CSA and the American
standard of RVIA would not compromise
safety for Albertans. Due to AMVIC’s
and RVDA’s lobbying, the Regulation
was recently changed and now states,
“Recreational vehicle CSA Standard
102(1) CSA Standard Z240 RV and the
United States Recreational Vehicle
Industry Association certification
process are adopted and apply to
recreational vehicles.”
m pac
pac t
t !! A
A Publication
Publication of
of the
the ALBERTA
ALBERTA Motor
Motor vehicle
vehicle industry
industry council
council
II m
SPRING
FALL 2008
2009
Musings from AMVIC’s executive director, Bob Hamilton
AMVIC receives very few consumer
complaints on advertising. Even several
years ago when the advertising was much
more misleading than it is today, only a
few consumers called with a complaint.
This puzzled me and required some
examination as to why. I think it is because
public education has trained consumers
to get the full story and to find out more
about the vehicle, they are going to have
to go to the dealership anyway.
What is a dealer trying to accomplish in an
advertisement?
1. The common answer is to create
interest in a potential buyer to get
them to come to the business and
check out the great deals.
2. Some advertising is designed to appear
that the business is the biggest with the
belief that many consumers think the best
deal is available at the biggest operation.
3. Some ads try to create a market position.
I then ask, what do consumers think of fine
print? What message is a dealership sending
by putting line after line of very small print?
Perhaps the dealer believes that this shows
that the dealership is very thorough and
concerned with detail. However, I do not
believe that is what consumers think. The fine
print is sending a message that the business
is trying to hide something. Manufacturer
ads are typically the ones where the fine
print is very lengthy and small.
for each payment listed. Include
EVERYTHING that is used to calculate
the payment. If the ad includes one
example, make it thorough and the
print large enough so that it does not
appear to be hiding anything. Typically,
the explanation for a payment includes:
cash price, annual percentage interest
rate, length of term, down payment (if
any) and total cost of financing.
“What a business has done in
the past does not have to be
what it does in the future.”
5. What does EVERYTHING mean? It means
exactly EVERYTHING. It must include
documentation fees, tire levy, freight, PDI
and any other non-discretionary charge.
You cannot exclude any of them.
The Automotive Business Regulation
provides good direction on what is required
in an advertisement. Here are the basics:
6. Many times, the AMVIC logo or indication
that it is an AMVIC licensed business is
missing. It is required to be there.
1. If the business is just advertising that it
is having a big sale, there is no need for
any fine print.
I have communicated directly with some
manufacturers to discuss the disclosure
necessary in advertising. I would be happy
to speak to any of them directly.
2. If the ad shows cash prices, there is
no need for any further disclaimer.
Just ensure that the prices include
EVERYTHING except GST.
3. If the ad has a certain interest rate, there
is no need for further disclaimer unless
the rate is for only certain models. Put
those models in big print. Do not hide
it in small print.
4. When advertising a payment, provide
an example for one of the vehicles.
Make sure to use the same parameters
Edmonton has the distinction of having
the most dollars per capita spent on print
advertising of any city in North America!
I encourage those in Edmonton and
throughout the province to think a little more
about its advertising practices. Be creative.
What a business has done in the past does
not have to be what it does in the future.
Feel free to contact me with any questions
or comments.
E: [email protected] T: 780.462.0860.
Buying a used vehicle in the U.S.?
Avoid fraud by using this new online service.
Go to: www.nmvtis.gov
The National Motor Vehicle Title
Information Service (NMVTIS) is an online
tool developed by the United States
Department of Justice to help protect
consumers from automobile fraud. If
buying a used vehicle in the U.S. use
the NMVTIS to access the vehicle’s brand
history, odometer data and basic vehicle
information. Brand history provides
information about the vehicle’s current
or prior condition and includes whether it
was ever classified as “salvage” or “flood.”
For many vehicles, one can even access
the full title record from the state where
the vehicle is currently registered. The
NMVTIS website links the user to a choice
of online service providers. For a small fee,
one can then purchase a report on any
vehicle for which NMVTIS has records.
NMVTIS currently has information for over
316,000,000 vehicles with over 46 million
brand records and over 1 million records
of vehicles designated as junk, salvage
or total loss as reported by junk yards,
recyclers and insurers.