Registrar's Decision 08-70539

Issues:

• Consumer wanted to buy car being leased by his friend.
• Lease company (also a motor dealer) referred consumer to another motor dealer to take care of the buy-out.
• Salesperson and dealer principal of second motor dealer finalized transaction, took the $19,000 and transferred car to consumer without informing Lease Company.
• Second dealer did not give Lease Company the money it was owed.
• Lease Company repossessed the vehicle.
• Consumer brought claim of deceptive act.

Outcome:

• Salesperson and second motor dealer committed a deliberate deceptive act or practice.
• Lease Company held out the second motor dealer as it agent to the consumer.
• Lease Company liable for the lost money as it is liable for the conduct of its agent.
• Salesperson, second motor dealer and Lease Company jointly and severally liable to repay consumer $19,000.
• Salesperson ordered to pay $1,500 administrative penalty and salesperson license was cancelled.
• Second motor dealer ordered to pay $20,000 administrative penalty. Dealer voluntarily surrendered its license.
• Lease Company not ordered to pay an administrative penalty in recognition that a fraud was committed against it by its agent.
• Lease Company cautioned about is business arrangements with agents and is expected to properly oversee its agents. A future failure to due so may be reason to suspend of cancel its license.

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