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Followup: Mazda terminates Canadian dealer that swindled customer

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Followup: Mazda terminates Canadian dealer that swindled customer

by Chris Shunk (RSS feed) on May 14th 2010 at 8:27AM

The public outcry over an unscrupulous Canadian Mazda dealership that sold a Mazda6 to a woman with a learning disability for over $25,000 Canadian dollars over sticker has been understandably strong. The Mazda6 wasn't even new and it was rolling on steel wheels for crying out loud. It appears that fact wasn't lost on Mazda corporate, as The Star reports that the dealer has been given the pink slip.

The Star quotes Mazda PR director Greg Young as saying, "We informed the dealer this morning that we were terminating the agreement because he had not adhered to the business standards, under the terms of the sales and service agreement." The terminated contract means the Orangeville dealer can no longer sell any new Mazda vehicles or parts to customers or make repairs. The hammer of justice has fallen, and the sound was deafening.

That's quite the punishment, there, but the Canadian government still hasn't taken its turn at the firing squad. Under the Consumer Protection Act the dealer is subject to a fine of up to $250,000, while the employees involved could be hit with a fine of up to $100,000 in addition to potential jail time. The owner of the dealership could also lose his license to sell vehicles. The next likely step in this saga is that Mazda of Orangeville will seek an injunction temporarily blocking Mazda's termination.

We had a feeling that justice would be done, but we didn't know the long arm of the law would be that swift. Thanks to everyone for the tips!



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Mazda axes Orangeville dealer over breaches

Car maker says dealer breached franchise agreement

Published On Thu May 13 2010EmailPrintRepublishAdd to Favourites Report an error

Tony Van Alphen

Business Reporter

Mazda Canada has terminated a dealership in Orangeville for breaching the company’s business practices including an incident where the store sold a car to a woman for more than $25,000 above its real value.

In a rare move, the auto maker announced Thursday that it had ended the sales and service agreement for Mazda of Orangeville effectively immediately, which means the store cannot sell any new vehicles and parts to customers or make repairs.

The move comes less than a week after the Star revealed the dealership had sold a 2010 Mazda6 G6 sedan to a local woman for about $66,000 including taxes and a trade-in car but she should have paid less than $41,000.

“We informed the dealer this morning that we were terminating the agreement because he had not adhered to the business standards, under the terms of the sales and service agreement,” said Greg Young, Mazda’s director of corporate public relations.

Young noted the huge overpricing of a car to the woman was one example of a breach but the company conducted an investigation and found other violations.

He added there are clauses in the agreement that state the dealer must conduct business in a way that reflects favourably on the image, reputation and goodwill of the store and Mazda.

Young, who could not recall a termination for such breaches in almost two decades at Mazda, said the company has received calls from customers in recent days in response to negative publicity about the incident.

As a consequence of the termination, Mazda will buy back any new vehicles and parts from the dealership. However, the dealership could still sell and service used cars on the lot.

Sunny Bains, president and principle of Mazda of Orangeville, met briefly with company officials at corporate headquarters in Richmond Hill on Thursday and later confirmed the decision.

“You heard that, it’s probably true but I got to go,” Bains said before hanging up.

Bains, who has operated the medium-sized Mazda store for about three years, could seek a temporary court injunction to stop the company from ending the franchise agreement.

The Ontario Motor Vehicle Industry Council, which regulates new and used car dealers, charged Mazda of Orangeville and two senior sales employees recently with “engaging in unfair practice by making an unconscionable representation,” contrary to the Consumer Protection Act.

The dealership faces a maximum fine of $250,000 and the two employees could receive $100,000 fines plus jail time of up two years if they are found guilty. They could also lose their provincial registrations to sell vehicles.

The Star found that the dealership sold a 2010 Mazda6 G6 to an Orangeville women for almost $66,000 or about 60 per cent more than she should have paid by charging her three times the value of extra items and saddling her with an eight-year loan. The woman should not have qualified for the loan because she is unemployed and living on a disability pension.

Furthermore, the dealership slapped several thousand dollars on the manufacturer’s suggested retail price on the car which wasn’t new.

Bains said he fired the two employees after the Star reported details of the deal but the regulator indicated that he has known about the questionable sale for somewhat longer.

Ex-manager “Moe” Shaihk, one of the defendants who lost his jobs, and Bains are also partners in a Suzuki dealership in Pickering.

Bains promised last week he would reimburse the customer, Madeline Leonard, so she “would not be short one penny out of her pocket.” But Leonard said she has not received anything yet including Bains’ promise of a new car.

Regarding Mazda Canada’s decision, Leonard said if the company thinks it is fair, “it’s alright with me.

“I’m the fairest person in the world,” said the 56-year-old woman. “I believe everyone should be fair and honest.”



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Good, hopefully this will be a lesson to any dealership who tries to do things like this. This Mazda dealership already had low ratings, its about time they get shut down.

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