Improving Consumer Protection for Vehicle Repairs

Transcription

1 Improving Consumer Protection for Vehicle Repairs Public Consultation Paper June 2011 Consumer Protection Office Manitoba Family Services and Consumer Affairs Portage Avenue Winnipeg, Manitoba R3C 0B6 Phone: Fax:

2 Let s Make a Better Deal TM is a five-year strategy from Manitoba Family Services and Consumer for stronger consumer protection. This plan aims to ensure that the marketplace is fair for everyone: consumers want fairness and honesty; and businesses benefit when rules are enforced that put all competitors on an even playing field. Simply put, better consumer protection means better business. Introduction Let s Make a Better Deal TM includes a commitment to address consumer issues with vehicle repairs. Repairing today s vehicles can be very costly. Vehicles are becoming more and more complex with the use of new materials and the increasing use of computers and electronics. While these complexities can create honest misunderstandings between consumers and repair shops, they can also make consumers feel vulnerable and intimidated. Although most repair shops treat customers fairly, complaints received by the Consumer Protection Office show that consumers are sometimes vulnerable and are taken advantage of by some repair businesses. Common issues reported by consumers include repair bills far in excess of estimates, repairs completed with refurbished parts without their knowledge, and repairs that fail shortly after they have been completed. The Manitoba government is considering taking measures to make sure consumers are dealt with fairly when getting their vehicles repaired. The Province wants to consult with consumers and industry on how to improve consumer protection in the vehicle repair marketplace. Some things being considered include: ensuring that cost estimates include specific information requiring customer authorization before repairs are made rules to ensure the final cost is close to the estimate mandatory warranties on most new and used parts and labour giving customers the option of receiving all old/removed parts Consultation This paper provides an overview of the vehicle repair industry in Manitoba, current consumer issues in the industry, and descriptions of related legislation from other provinces. Your feedback is very important. The Province of Manitoba wants to consider all interests to ensure any new legislation developed is right for Manitoba. All comments, including proposed changes, questions and potential solutions are welcome. Your feedback will be used to create better protection for consumers and improve the vehicle repair industry in Manitoba. 2

3 Confidentiality Any personal information you provide as part of the consultation is protected under The Freedom of Information and Protection of Privacy Act. It will be used for the consultation only. Your personal identity will not be given out or made public without your consent. Current Situation in Manitoba There are more than 770,000 licensed drivers and 950,000 licensed vehicles in Manitoba. Vehicle owners typically visit repair shops several times a year for maintenance, mechanical or collision repair. There are approximately 1,300 businesses in Manitoba that repair and maintain vehicles, such as: auto body and paint shops motor vehicle dealerships with repair facilities used-car lots that do repairs neighbourhood garages muffler shops Annual vehicle repair and maintenance costs for vehicles in Canada, excluding tires and collision work, are estimated at $850 per year. Manitoba s vehicle repair and maintenance industry market is about $520 million dollars annually. Consumer Issues Every year, the Consumer Protection Office receives a significant number of complaints from consumers about vehicle repairs. These complaints commonly involve: failed parts repair costs that were much more expensive than estimated the use of refurbished parts without the consumer s knowledge repairs that do not last for a reasonable period of time Current Trends The vehicle repair industry is changing for both consumers and business. Vehicles are becoming safer and more reliable. Newer vehicles can have longer intervals between scheduled maintenance. The increased use of technology in vehicles (ex: hybrid engines, self parking vehicles) is affecting the repair industry by placing more of an emphasis on diagnostics and the use of component parts. 3

4 Diagnosis is becoming increasingly important and requiring more time as a proportion of overall repair time. Increased use of aluminum and non-traditional materials in vehicles can affect the time, personnel, and approach required to complete repairs. There is a decline in the number of collision repair shops in Manitoba and the smaller shops are giving way to the larger companies. Better information is being made available to the service and repair industry by manufacturers, which increases the number and type of service options for consumers. Current Consumer Protection in the Manitoba Marketplace Like all businesses, vehicle repair shops operating in Manitoba must comply with The Consumer Protection Act and The Business Practices Act. The Consumer Protection Office administers these two acts and mediates disagreements between consumers and businesses. The Consumer Protection Act provides for hearing, investigating and mediating consumer complaints related to consumer purchases. The Business Practices Act applies to unfair business practices in the marketplace related to consumer transactions where a consumer might be deceived or misled. These acts are general, and do not have specific rules for the vehicle repair industry. The Drivers and Vehicles Act, administered by Manitoba Public Insurance (MPI), publishes consumer protection information on its website. It lists the names of businesses that have been sanctioned by the Registrar of Motor Vehicles. Penalties are applied to dealerships, inspection stations, and mechanics that do not comply with the law. Consumer Protection in Other Provinces Consumer protection legislation in Ontario, British Columbia, Alberta and Quebec includes specific sections for vehicle repairs. Key points include estimates, warranties, consumer authorization, and information disclosure. Signs Repair shops must display a sign that list their costs and repair practices, including: That the repairer is required to offer a written estimate unless declined by the consumer That replaced parts will be returned to the consumer if requested How labour costs are calculated (including the hourly rate and any flat-rate charges) Whether there is a fee for estimates and whether commissions are paid to mechanics 4

5 Estimates Repair shops must give written estimates to consumers unless the consumer doesn t want one or authorizes a maximum amount for the repair. Final charges for repair work have to be the same or close to the estimate, unless the consumer agrees to the increase verbally or in writing. In Quebec, there can be no extra charges for the repairs described in the estimate. In Ontario, the repair charges can t be more than 10 per cent above the estimated amount. In Alberta, the repair charges can t be more than 10 per cent and can t be more than $100. Repair shops can charge fees for estimates, but consumers must be told about any fees in advance. If a repair shop charges a fee for an estimate it must include an estimate of all charges for labour, parts, and re-assembly. When an estimate for repair work is given to a consumer, it must include: name and address of the consumer and the repairer make, model, vehicle identification number, odometer reading, and licence number of the vehicle part(s) to be installed and whether the part(s) are new or used prices of the parts cost of labour and how it is calculated nature and total price of the repair date the estimate is made and period it is valid for date when work and repairs will be completed In Ontario, a repair shop can t charge for the estimate if the consumer agrees to have the work done by the repair shop. The exception to this rule is that a repairer can charge for the estimate if the consumer makes the repair shop wait for authorization, forcing the repair shop to reassemble the vehicle to make room for other work. In Quebec, work costing $50 or less, including parts and labour, is not considered a repair. Written estimates are only required for work, including parts and labour, costing more than $100. In Alberta, businesses can t tell consumers that they can perform a particular repair or service unless they have the equipment, tools, and expertise necessary to do the installation, repair, or service. Repair shops can t subcontract repair work to other shops/mechanics without the customer s knowledge and consent. Authorization Repairs can t be done unless the consumer has given permission, by phone or by signing the estimate. 5

6 Warranty In Ontario and Quebec, repair shops must provide a warranty for 3 months or 5,000 kilometres, whichever comes first. This applies to most new and used parts as well as the labour costs involved. This warranty does not cover damage resulting from abuse by the consumer after the repairs. Return of Replaced Parts Repair shops must return the old parts replaced during the repair to the consumer if asked to. This allows the customer to see for themselves that the part(s) actually needed replacing. Exceptions to this can include: the repair is provided without charge to the customer the replaced part is exchanged for a retooled or reconditioned part the replaced part is subject to a warranty contract and the repairer must return the part to the manufacturer Invoices When a repair is completed, the consumer must be given a bill indicating: name and address of the consumer and repair shop make, model, and vehicle identification number of the vehicle date of delivery of the vehicle to the consumer and the number of miles or kilometres on the vehicle on the date the repairs were carried out part installed, noting if it is new, used, re-tooled or reconditioned, and its price number of hours of labour billed, the hourly rate and total labour cost taxes charged under a federal or provincial act total amount the consumer must pay for that repair characteristics of the warranty 6

7 Considerations for Manitoba Many consumers feel at a disadvantage when dealing with vehicle repairs given the complexity of today s vehicles and the need to have a safe and reliable vehicle. The use of technology, component parts and specialized materials in today s vehicles are affecting the way repairs are approached and can create challenges for repair shops to accurately identify and quote the repairs to be performed. Any new measures in Manitoba need to address current consumer issues related to vehicle repairs while being fair to both consumers and businesses. Feedback We hope to gather information and feedback from all stakeholders, such as consumers, consumer groups, and members of the vehicle repair industry in this consultation. Your submission and comments are an important part of this process. We have developed discussion questions to help guide you or your group in preparing your submission, however other comments are also welcome. Questions 1. What do you think are the most important consumer protection issues for vehicle repairs in Manitoba? 2. Should it be mandatory for repair shops to give consumers a written estimate? If so, what should be included in the estimate? 3. Is it reasonable for the repair shop to do the estimate at no cost if the consumer agrees to have that repair shop do the repair? 4. Should there be legislation that states the final cost of repair can t be more than 10% of the initial estimate, unless the consumer agrees? 5. Is a mandatory warranty on new and used parts and service for vehicle repairs an important consumer protection? What will it mean to the repair industry? 6. Would it help consumers to have the right to be given the old/replaced part after the repair is done? 7. Are there any industry issues that Manitoba should be aware of in considering consumer protection? 8. Are there types of parts or services that should be included or excluded from regulation? 7

8 9. Should new legislation apply to all businesses and individuals performing repairs or are there businesses or individuals that should be excluded? 10. What type of penalties or consequences should a business face for not complying with new legislation for consumer protection in automotive repairs? We welcome all comments, including proposed changes, questions and potential solutions. Your feedback will be used to create better protection for consumers and improve the vehicle repair marketplace in Manitoba. Please send your feedback, by August 15, 2011, by mail, or fax to: The Consumer Protection Office Manitoba Family Services and Consumer Affairs Portage Avenue Winnipeg, Manitoba R3C 0B6 Phone: , toll-free Fax: consumers@gov.mb.ca Thank you for contributing to our public consultation. 8