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Make a Compensation Fund Claim

The  Motor Dealer Customer Compensation Fund  provides compensation to consumers who have lost money because a motor dealer has either gone out of business or has failed to meet certain legal obligations. The money in the Fund comes from contributions made by all licensed motor dealers in BC.  The Fund is the last resort for dealing with a dispute with a dealer and only some types of losses are covered by the Fund.

Who can I contact for more information?

If you have general questions about the Motor Dealer Customer Compensation Fund, you can contact VSA Consumer Services for more information:

Vehicle Sales Authority of BC
280 – 8029 199th Street
Langley, BC V2Y 0E2

Tel: 604.575-7255 (Lower Mainland)
Toll free: 1. 877.294.9889
Fax: 604.574.5883

E-mail: consumer.services@vsabc.ca

Who is covered by the Fund?

To be eligible for compensation from the Fund, you must meet all of the following requirements:

You must be an individual, not a corporation, partnership or any other kind of business.
You must have entered into an agreement with a registered motor dealer in BC to do one of the following:
- buy or lease a vehicle
- buy an extended warranty or service plan for a vehicle, or
- consign your vehicle for sale by a dealer.
If your agreement was to buy or lease a vehicle or buy an extended warranty or service plan for a vehicle, you must have used (or intended to use) the vehicle primarily for personal or family purposes and not primarily for business purposes. This means that more than half of your use of the vehicle (or intended use) must be for personal or family purposes
The loss you suffered must be a type of loss covered by the Fund (see What types of losses are covered by the Fund?)
You must have made a demand to the dealer to pay the loss, which the dealer refused or failed to pay
Your claim must be related to the transaction that happened no more than 4 years from the date of your Demand to a Motor Dealer

What can I do if I bought from a dealer that is out of business and I have a problem?

Compensation is available from the Motor Dealer Customer Compensation Fund for consumers who lost money because a dealer has gone out of business or has failed to meet certain legal obligations. There are limitations to the losses that are covered. If your dispute is with a dealer still in business, the Compensation Fund may not be the best option for you. See Resolve a problem when a dealer is licensed. You may also want to consult a lawyer to see if you have any other legal remedies. There may be time limits and you should take steps to understand your rights as soon as possible. See Consumer Protection facts- Legal Resources.

What is the Motor Dealer Customer Compensation Fund?

The fund compensates qualified consumers who have lost money because a motor dealer has either gone out of business or has failed to meet certain legal obligations
There are limits on who can apply for compensation and what types of losses are eligible
The maximum amount of compensation is $20,000 per eligible loss
Claim decisions are made by the Motor Dealer Customer Compensation Fund Board based on the requirements and limitations of the legislation establishing the fund
All licensed dealers in BC make contributions to the fund

How do I know if my transaction qualifies for an application for compensation?

You must be by an individual (not a corporation, partnership of any other kind of business
Your dispute must involve a motor vehicle. Disputes involving all-terrain vehicles, farm tractors, motor assisted cycles, or construction, mining or logging machinery are not eligible
Your dispute must involve an agreement with a dealer licensed in BC to:
- buy or lease a vehicle, or
- buy an extended warranty or service plan for a vehicle, or
- consign your vehicle to be sold by a dealer
Your transaction must involve a vehicle intended primarily for personal use. See the Compensation Fund Use of Vehicle
Your claim must be related to the transaction that happened no more than 4 years from the date of your Demand to the Motor Dealer

What losses from the purchase or lease of a vehicle are eligible?

You are eligible to apply if you paid money or traded a vehicle to a dealer, as part of an agreement to buy or lease a vehicle, and:

The dealer refused to deliver the vehicle you agreed to buy or lease, and the dealer had no legal right to keep the money you paid
The dealer was unable to deliver the vehicle because the dealer went out of business and the dealer had no legal right to keep the money you paid, or
The loss of the money or the trade-in vehicle was caused by the dealer’s dishonest or illegal conduct

You are eligible to apply to recover the cost of an unpaid lien on the vehicle you bought or leased if:

You had to pay a third party to clear the title of the vehicle, or
The vehicle you purchased was seized by a third party and not returned to you

What losses from the purchase of a warranty or a service plan are eligible?

You are eligible to apply if you bought a warranty or a service plan on a vehicle but later you were unable to use some or all of the warranty or plan. You loss may be covered if this happened because the dealer went out of business or because of some other failure by the dealer.

What portion of the loss from the purchase of a warranty or a service plan will be covered?

If your loss is eligible, you may be compensated for the lost value of the warranty or service plan. For example, if you bought a five year warranty and the warranty provider went out of business after two years, the amount of compensation would be calculated as three years of lost warranty, or 60% of what you paid.

What losses from the purchase of a warranty or a service plan will not be covered?

You cannot be compensated for the actual cost of any repairs or service that might have been covered if the warranty or plan was still in effect
You cannot be compensated if a warranty or service plan is insured by another party
Disputes with a dealer about what should be included under a warranty or service plan are not covered

What makes a loss from the consignment of a vehicle eligible?

You are eligible to apply if the dealer refused to return the unsold vehicle or deliver the money from the sale of the vehicle, and the dealer had no legal right to keep the consigned vehicle or the money from the sale of the vehicle
You are eligible to apply if the dealer went out of business and was unable to return the unsold vehicle or deliver the money from the sale of the vehicle, and the dealer had no legal right to keep the consigned vehicle or the money from the sale of the vehicle
You are eligible to apply if the loss of the consigned vehicle or the value of the consigned vehicle was caused by the dealer’s dishonest or illegal conduct

How do I apply if my transaction qualifies and my loss is eligible?

Before making a claim, you must first make a written Demand to Motor Dealer. The Demand must be made within 4 years of the date of the transaction to which the demand relates. Instructions in the form will tell you where to send the Demand
If your Demand is not satisfied within 30 days, or if you receive a response from the motor dealer and you are not satisfied with the response, you can make a claim. You have 120 days from the date of your Demand to Motor Dealer to make a claim. In certain circumstances, the Registrar of Motor Dealers may provide an extension to this term. Contact VSA Consumer Services if you need an extension
Prepare a Claim Application and gather all the documents listed in the form
Send your completed claim application to the VSA by email, mail, fax or deliver it in person

Why is my private information being collected?

Your information is needed for your claim to be evaluated and investigated
Your information is needed for administrative action to be taken
Your information and statements may be shared with the dealership
The VSA Privacy Policy guides the collection and use of your private information

Can the VSA provide information about my claim to another person?

The VSA will provide information about your claim to another person only if you provide consent
Unless the person is already your legal representative, you must complete an Authorization for Release of Personal Information and Records Form

What am I agreeing to if I send in a signed claim application?

You are agreeing to the Assignment and Undertaking terms in the claim application
You are agreeing to the use of your information for investigative and statistical purposes
You are agreeing that the information is true and accurate to the best of your knowledge
You are agreeing that, if the information you provide is a part of a formal decision, it may be posted on this website

Do I need a lawyer to represent me?

No, you do not need a lawyer to represent you in the claim process
Information on how to prepare a written submission to an administrative tribunal, can be found in the Justice Education Society’s Guide to Administrative Law in BC website

How long does it take for an application for compensation to be decided?

Typically, it takes three to six months for the investigation and the decision
The length will vary based on how complex it is and availability of VSA staff resources

Does it cost me anything to apply for compensation?

No, you do not have to pay any fees to apply for compensation from the Fund.

What do I need to know about the hearing?

How to prepare: To prepare for a hearing, you need to make sure that your application form and any supporting documents are complete. Prior to the hearing, you will receive a copy of any material that the Board will consider at the hearing. This may include the dealer’s written response to your application and the results of an investigation or research if that has been done to assist the Board in making a decision. You should review these materials, and if necessary, you should send a written response within the time allowed for a response.

What happens at a hearing: At a hearing, the Board reviews your application for compensation, the dealer’s response, the results of an investigation or research that has been done to assist the Board, and any further responses submitted by you or the dealer. The Board then applies the criteria contained in the Motor Dealer Act and the Motor Dealer Customer Compensation Fund Regulation to the facts of the case and determines if the claim is eligible for compensation and if so, the amount of compensation to be awarded. Sometimes, the Board may adjourn the hearing of an application to a later date in order to obtain additional information required to make a decision.

How do I find out about the results of a hearing? After the hearing, the Board will send a letter to you and the dealer, informing you about the decision and the reasons for the decision.

What if I don’t agree with the Board’s decision? Under the law, a decision of the board is final. However, you have two options if you do not agree with the Board’s decision. Your first option is to request that the Board reconsider its decision. Under the law, the Board may, at its discretion, reconsider its own decision. Generally, the Board will only agree to reconsider a decision if you can provide new evidence that was not available to you before the hearing. The new evidence must also indicate that the Board’s decision may be wrong or may have been made unfairly. Your second option is to file an application in the Supreme Court of BC for a judicial review of the Board’s decision. If you would like more information about judicial review see the Justice Education Society’s Guide to Administrative Law in BC or talk to a lawyer. .