Registrar's Decision

Compliance > Registrar’s Decisions > Registrar’s Decision 13-11-001

Registrar's Decision 13-11-001

File Number: 13-11-001

In the matter of THE MOTOR DEALER ACT R.S.B.C. 1996 C.316
and THE BUSINESS PRACTICES AND CONSUMER PROTECTION ACT S.B.C. 2004 c.2

Complainant: Jesse MacDougall

Licensee/Unlicensed person:

AUTO/ONE LEASING LP, RALPH SCHONWETTER, CECILIA DENEGRI-JETTE, and WHITNEY McELROY

Issues:

A hearing was called due to an allegation that 2258756 Ontario Ltd. dba Auto/One Leasing LP (“Auto/One”) represented to Jesse MacDougall (the “Consumer”) that he was receiving an extended warranty that he had paid for, when he did not.
The allegations also allege that this conduct was done by Ralph Schonwetter, Cecelia Denegri-Jette along with Whitney McElroy.
Whitney McElroy negotiated the price of the BMW and the warranty with the Consumer. Whitney McElroy then sold the BMW, with the extended warranty, to Auto/One. Auto/One leased the BMW to the Consumer.
It was found that the premium for the extended warranty was not paid to the warranty company, Global Warranty.
It was further found that the BMW sold to the Consumer would not qualify for an extended warranty as it was a rebuilt vehicle. All parties, including the Consumer, knew that the BMW was a rebuilt vehicle before the transaction occurred.
Auto/One claimed they were not the dealer in this transaction, but that they only financed the deal by leasing the BMW to the Consumer.

Outcome:

By leasing the BMW to the Consumer for purposes that were primarily personal, family or household use, Auto/One was the motor dealer in this transaction.
Auto/One and Mr. Schonwetter made a negligent misrepresentation to the Consumer by indicating he was purchasing a valid warranty when he did not. They made no effort to confirm with Global that Global would honour a warranty on a rebuilt vehicle. It is common knowledge within the industry that rebuilt vehicles are generally denied warranty coverage. Global warranty and its warranty programs are also well known within the industry.
Auto/One and Mr. Schonwetter are jointly and severely liable to refund the Consumer the $1,999 plus taxes he paid for the warranty.
Auto/One is required to implement a policy and procedure of verifying with the warranty company, the validity of any warranty being offered on rebuilt vehicles.
The Registrar found that Whitney McElroy misled Auto/One and Mr. Schonwetter but that Auto/One and Mr. Schonwetter could have taken steps to verify the validity of the warranty. The Registrar found in these circumstances, no administrative penalty was necessary to ensure future compliance.
Ms. Denegri-Jette must successfully complete the Salesperson Certification Course within 60 days of the date of the decision, at her own cost. Whitney McElroy is prohibited from being licensed as a salesperson or registered as a motor dealer in the future.