The province will implement recommendations after a review of the Alberta Motor Vehicle Industry Council (AMVIC).
That review was ordered in August as a result of numerous complaints that the watchdog group wasn’t doing a good enough job of protecting consumers.
The case of Treadz Auto Group is one of the main motivating factors. It was the largest auto consignment fraud ever investigated in Calgary, with customers saying the company sold their vehicles on consignment and then kept the money. Police investigated 120 complaints and found that people were not paid in 78 of the cases. The owner was charged with fraud amounting to $2.2 million.
At the time, customers were told by AMVIC that it was a civil matter and they would get nothing from the organization’s victim compensation fund.
On Tuesday, the province announced that it will implement all 22 recommendations from the review to help protect consumers, starting with the removal of John Bachinski as CEO of AMVIC. A new position of registrar will be created to distance the new CEO from the day-to-day operations of AMVIC.
The report also recommends equal representation for the industry and public in the organization, improving internal management and governance and will address concerns about the compensation fund.
“The compensation fund is at the $4 million cap but has paid out almost nothing to consumers. This is not acceptable and it needs to change,” said Stephanie McLean, Service Alberta Minister. “The report makes recommendations on how to structure the fund in a new way that supports Albertans.”
But not everyone is reassured by the announcement. Andrea Scherle is a former customer of Treadz Auto who tried to sell her $46,000 Dodge Ram but ended up with no truck and no money and still has to make payments on the truck.
“In the almost three years that I have been dealing with this, consumer pro-activeness has not been at the top of their list,” she said. “They say there are here to protect the consumer, but here I am three years later still out my money.”
Alberta’s opposition party is also unimpressed, saying stronger, clearer recommendations should have been made regarding the compensation fund.
“When Albertans are getting defrauded by licensed businesses they should have access to the fund, but the rules are so restrictive that AMVIC is stockpiling cash rather than compensating consumers,” said Wildrose Shadow Service Alberta Minister Wayne Anderson in a release. “Instead there is a recommendation to have a new group that will determine the rules. We were hoping for immediate improvements in this area, instead Albertans will get more delays and more study.”
But the province is standing by its actions, saying the recommendations will put AMVIC on the right track so that's it's effectively regulating the industry and putting consumer’s interests first.
