Alberta government vows action on auto dealer fees
'Very serious issue that demands the attention of government,' says minister
Service Alberta Minister Manmeet Bhullar says the government wants the Alberta Motor Vehicle Industry Council (AMVIC) to take action against car dealers that gouge customers with excessive, even fictitious fees.
"I see it to be a very big problem," said Bhullar, "a very serious issue that demands the attention of government."
A CBC Go Public investigation found examples of dealers charging car and truck buyers hundreds of dollars in extra fees after a price had been negotiated.
The extras included options such as having windows and body panels marked with serial numbers as a theft-deterrent, at costs ranging from $295 to $599.
The Insurance Bureau of Canada told Go Public it wasn’t aware of any study showing such serial numbers actually reduce the risk of vehicle theft in Alberta.
Other commonly-charged extras are tire warranty packages, which include the inflation of tires with nitrogen gas, which added costs ranging from $599 to $698.
Customers told charges are mandatory
Customers told Go Public they found these charges added to the sales contract after they had agreed on a price, and that they were told the charges were mandatory.
"They didn’t give me an option," said Darren Bezanson of Grande Prairie. "They led me to believe the registration was part of the paperwork and the nitrogen hazard was part of the purchase of the vehicle."
Bhullar says that can’t happen under Alberta law. He says the only mandatory extra charge is the GST. Everything else is an option and that’s what the customer must be told.
"If these charges are being added-on after the fact, that's a misrepresentation and that violates the rules and regulations we have in place today," he said.
Sales contracts also showed dealers in Edmonton charging $395 for "Documentation Fees".
The Alberta Motor Vehicle Industry Council, the independent body that regulates the auto industry, says there are no regulations governing what a document fees covers or what the maximum fee can be.
George Iny of the Automobile Protection Association says "DOC. FEE" is often an acronym for "Dealer Overhead Charges."
"There is no document that costs $200 or $300 to fill out," Iny said.
Other fees 'ridiculous,' possibly illegal: minister
Darren Bezanson’s son was charged $503 for a "tire recycling surcharge" by a dealership in Grande Prairie. No such fee exists.
If you feel you were misled or paid for something you didn't want, ask to speak to the general manager of the dealership.
If you're not happy with the response, contact the provincial regulator, the Alberta Motor Vehicle Industry Council (AMVIC).
Edmonton office: 780-466-1140
Calgary office: 403-301-2744
"I think that is ridiculous," said Bhullar. "To slap on a fee, call it a fancy name, to make it sound like it has something to do with government and imply that it’s a must, is wrong."
Sales contracts also showed customers being charged a $100 federal excise tax on air conditioning.
According to the Canada Revenue Agency, the tax is collected when a vehicle is imported into Canada, raising the possibility of the $100 being collected twice.
Bhullar says the tax, along with everything but the GST, should be included in the retail price.
"I presume that collecting a government fee twice and submitting it once is a pretty serious issue," said Bhullar. "That’s not legal."
Bhullar says AMVIC has launched almost 400 investigations into consumers wrongfully being charged extra fees.
Last fall the government tripled the maximum fine for breaking the Fair Trading Act to $300,000 or up to two years in jail.
The government is also working on legislation giving AMVIC the power to levy administrative fines of up to $100,000 without going to court.
"We’ve beefed those laws up," said Bhullar. "Now I expect all of our regulatory bodies, including AMVIC, to go out and ensure that they are being enforced."