Customers should ask for refunds on extra fees, car dealers association says

If you bought a car in the last 15 months, you may be entitled to a refund of the fees you paid over and above the advertised price, according to the Manitoba Motor Dealers Association.

More car buyers have contacted CBC's I-Team since investigation revealed fees

Brent Morgan and his five-year-old daughter, Quinn, stand in front of the van he purchased at Birchwood Kia this spring. Morgan said he paid $799 in extra fees. (CBC/Jeff Stapleton )

If you bought a car in the last 15 months, you may be entitled to a refund of the fees you paid over and above the advertised price, according to the Manitoba Motor Dealers Association.

"If they've said something is non-negotiable and forced it on a consumer, beyond the advertised price, then the consumer should be getting that money refunded," executive director Geoff Sine said in an interview with the CBC News I-Team.

Sine was reacting to an I-Team investigation that found seven out of 10 salespeople at big-name Winnipeg auto dealerships added extra fees to advertised prices.

Under Manitoba's consumer protection legislation, car ads in the province as of June 1, 2015, must state the total price, including all additional charges except the PST and GST. Charging extra fees in and of itself is not against the law. The legislation aims to ensure "truth in advertising."

Geoff Sine, executive director of the Manitoba Motor Dealers Association, says consumers who were forced to pay fees should have that money refunded by dealers. (CBC/Jeff Stapleton)

Shoppers told fees weren't optional

The investigation found that four out of five Birchwood salespeople and all three Gauthier salespeople added extra fees ranging from $599 to $1,799 to advertised prices.

Undercover shoppers from CBC were told the fees are not optional and everyone has to pay them. A few of the salespeople said they paid the fees themselves.

"I have no idea of how widespread this is," Sine said, "but if there [are] those consumers out there we certainly want them to take the steps necessary to feel that they've been protected by the law, and if they feel that they've paid more than the advertised price then they should go back to that dealership or the Consumer Protection Office."

It’s a law that is supposed to protect car buyers from surprise fees. But more than a year after it came into effect, extra fees are routinely being added to the advertised price of vehicles at many dealerships. 1:36

Birchwood president Steve Chipman said he acted immediately after hearing the results of the I-Team investigation, ordering the re-education of 135 salespeople and their managers.

Gauthier has not responded to requests for an interview.

When asked what Birchwood would do for customers who felt they paid added fees over advertised prices, Chipman said all completed car deals were compliant with the legislation.

"We have sufficient oversight by our sales managers who finalize the purchase price and the financial services managers who complete all paperwork for the transaction, including the bill of sale, to ensure that the purchase prices that our customers have paid for their vehicles were compliant with the new legislation," Chipman said in an email. 

When asked if there will be any changes to the way Birchwood advertises, Chipman responded, "Our advertising is and has been 100 per cent compliant with the legislation. We do not charge dealer fees to complete the vehicle purchase."

But that's not what some of customers told the I-Team.

Brent Morgan bought a 2016 Kia Sedona that he found on the Autotrader website from Birchwood Kia for $29,998 in April of this year.

While he did not keep the original ad, an invoice he provided to CBC News shows that Birchwood Kia charged him $799 for the Birchwood Advantage on top of the price he said was advertised.

Morgan said he knew about the legislation going in, but he gave in because his energy was spent after a long negotiation process.

"I would love to get it back," he said, adding that  he is going to approach the dealer for a refund. "I could get some winter tires for the van."

Consumer Protection Office open to complaints

Beatrice Dyce of the Manitoba government's Consumer Protection Office explained to the I-Team what constitutes a breach of the legislation.

"If a consumer went to a dealership with an ad, or even without the ad but on the basis of an advertised price, and when they started to negotiate or speak about purchasing that car and the dealership salesperson said, 'On top of that price you're going to have to pay a documentation fee, an administration fee, a tire tax,' then that is in breach of the legislation," she said.

"The legislation does not compel a business to provide a refund," Dyce said, adding that a refund could be a possibility in a mediated settlement between her office and the dealership.

"I would recommend anyone who has concerns about whether they have paid extra fees or taxes or charges for the vehicle to contact the Consumer Protection Office and we can investigate."

Beatrice Dyce, director of the Manitoba Consumer Protection Office, encourages people who were charged extra fees to contact her office. (CBC)

Jim Rondeau, who was consumer protection minister in the former NDP government, said he worked to tighten up rules related to truth in car advertising after hearing complaint after complaint roll into his office.

"There were lots of complaints and lots of misunderstandings," said Rondeau.

Since the legislation came in last June, five people have complained to the Consumer Protection Office about extra fees being added to car prices in ads. All five complaints were judged to have merit and "resulted in compliance being obtained by the Consumer Protection Office."

On top of the five complaints, there were 83 inspections and one administrative penalty issued for advertising the lower financing price rather than the cash price.

'Let the public know,' says advocate

George Iny, director of the Automobile Protection Association, said the province needs to get tougher with enforcement.

"I don't know why the industry is so resistant to integrity in price advertising but it is, and I guess the oversight in Manitoba — you need to step up your game," he said.

George Iny is the director of the Automobile Protection Association. (CBC)

He added, "I think there's a lot of tolerance with some regulators initially, at least, when these new requirements come out, for the old way of doing business."

Iny said Quebec has found a way to keep dealerships accountable by publishing the names of those who break the rules.

"The regulator could at least try publicity. So name and shame," he said.  "Put up on your website who was non-compliant…. Let the public know."

Got a tip for the CBC News I-Team? Email or call the confidential tip line at 204-788-3744.


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