Secret shoppers from Canada’s Automobile Protection Association uncovered some deceptions and fraud at 13 Vancouver, B.C. car dealers earlier this month.
According to a story on the APA’s website, they sent shoppers to 16 dealerships, but only three of them earned a Pass rating. The remaining 13 dealers failed for one reason or another.
Four of the dealers failed because they were pulling a bait-and-switch. That’s where they advertise a base model of car at a very low price, and then tell customers that model’s not available anymore before upgrading them to a more expensive model. In some cases, secret shoppers were told that the base model was only available as a factory order, and would take as long as six months to arrive.
Four dealers were also found to have added several extra charges, including charges for things like filling out paperwork and fake “Green” charges that look like payments to some environmental authority that doesn’t actually exist. The APA story even said that while some charges were in the fine print of the dealer advertising materials, other charges seemed to be completely made up. Secret shoppers found charges like a $795 brokerage fee, $549 to fill out a bill of sale, and an Additional Dealer Markup (listed as ADM) of $1,599.
The APA also found deceptive advertising offers, such as a Ford dealer promising a $1,000 discount to Costco members, although it wasn’t available on the model of Ford Focus the secret shoppers inquired about.
Secret shoppers were also given a lot of misinformation and misrepresentation about the warranties. In fact, half of the dealers misrepresented the manufacturer’s warranty for rustproofing as a way to upsell extra coverage.
“If a salesperson tells you there’s no corrosion warranty on a new vehicle, they’re lying,” said the APA. “All carmakers offer corrosion warranties from three to 12 years, depending on the brand.”
The APA urged British Columbia’s Vehicle Sales authority to “clamp down on dealerships that add extra charges” as well as close loopholes that let auto manufacturers break the rules that apply to dealer advertising.
In the meantime, congratulations to the Canadian Automobile Protection Association and their secret shoppers for protecting Canada’s buying public from overpaying for their cars or getting needlessly ripped off.
If your organization ever needs secret shoppers for fraud enforcement and legal compliance, Measure CP can help. Our team of experts can help you put together a brand protection and compliance program to ensure the laws and regulations are being met and people are being protected from unscrupulous or dangerous violations.
Photo credit: Don O’Brien (Flickr, Creative Commons 2.0)