TERRIBLE - Prima Lease Buyout Scam

[ecokenny]

I bought my Mazda 3 from Prima in May 2004. I loved the car and decided to take out a loan from the bank I am working for to buy out the lease in the in Nov. 2005 (1.5 years into the 48 months lease).

I took out a bank draft with the buyout amount to Prima and handed over to the Leasing Manager Warren. Also Warren advised me that eventhough I am paying off my lease, I would still receive statements for the next few months asking for payment but I could ignore them because Mazda's computer system needed some time to update before stop sending out monthly lease statements. Ok fine.

So for the following months I have been getting statements and ignored them all. After a year, Nov. 2006, curiousity triggered me to call Mazda Canada Credit to find out why was I still receiving statements one year after my lease was bought out. Know what the telephone agent told me? They never received my buyout bank draft I gave to Prima a year ago and the car is still showing "Lease" status. I told them it was impossible because I have my vehicle registration changed to my name and it is only showing my name on the registration now (normally for leased vehicle it has both the owner's name and Mazda Canada Credit's name on). What is more surprising are yet to come. I then asked the agent since Mazda Canada has not received my buyout draft, and I hadn't made any payment to this vehicle for the last year since I bought out my vehicle, how come my car is still not being reprocessed? The agent then said because we have been receiving payments from "someone" every three months to make the lease payment up to date......I was shocked.....(btw, it is not a bank error because I have closed out the account where lease payment came off every month and I work at the bank and can monitor my own account activities all the time)

By this time, I pretty much figured out what happened. This dealership took my buyout bank draft money and deposited into their own account and every three months, they cut a cheque to pay my 3-months accumulated payments at one shot. Reason behind this was they can earn interest on my $20k buyout by having it in their bank account for the remainder of my lease term and number two by having my vehicle still on lease status, they can retain their lease volume. One stone kills two birds, why not eh?

One day after my initiate call to Mazda Canada Credit, a customer service manager from there called me back and admitted the way this dealership handled my lease buyout is not proper. She asked me to fax a copy of the buyout bank draft and the bill of sale proving I have paid off my vehicle. I did so immediately, and she had sent out a lease payoff statement to me the next day.

Next day, I wrote a letter to the president of Mazda Canada regarding the issue. I urged him to look into internal procedures because there are obvious flaws. He replied me via his assistant promising to have internal procedures looked at and forwarded the case to the regional management to follow up. I haven't heard from him since then.

This was scary because what if Prima goes bankrupt while they have my money in their bank account while Mazda Canada Credit is still holding the ownership of my vehicle? In this case...

Prima Mazda has my money.
Mazda Canada Credit has my car.
Mazda Canada Credit still shows I owe them money on the car lease.
My bank would show I owe them money on the loan I took out.

What do I have? Scary eh??

Btw, I was never compensated for my time and undue exposure of financial risk.

[S.F.W.]

wow, that really is scary.

[Gizzmo_jr]

Good ******* lord that's horrible. Happy you got on top of things, and explained to anyone else that might get themselves in the same situation.

[Broli]

damn!!

what made you wait a year to check it out?

[FLIPDADY]

Where's Dennis?

aka PrimaDeals?

[Jeff-TheBiz]

No Clue how this could have happened.. especially if they are still recieving the payments??

WTF?

[ecokenny]

damn!!

what made you wait a year to check it out?


Because the leasing manager told me I would still get a few more statements before the system will recognize this lease has been paid off. I trusted their expertise but they really had taken advantage of my faith. I personally know the person who sold me the car, but couldn't understand why they would take advantage of me.

I figured it can happen on me, it can happened to anyone who paid off their leases.:flaming

[TheProfessor]

That is very scary, but the question is, is it illegal in any way or simply irresponsible?

[b]

I would call a lawyer. You would have no problem winning this case & possibly be able to come out ahead. Payments being in 3 month chunks would show on your credit rating.

[ecokenny]

That is very scary, but the question is, is it illegal in any way or simply irresponsible?

I figure the dealership is just being not ethical. If it is a legal issue, then I don't think they would still allow the manager to be working in the dealership today as I can still see his name posted on their dealership website.

[ecokenny]

I would call a lawyer. You would have no problem winning this case & possibly be able to come out ahead. Payments being in 3 month chunks would show on your credit rating.

I have just pulled my credit report yesterday and thank god there is no signs of missing payments. They must have ways to get around so that even payments were made every 3 months, it is still not affecting my credit history.

I am sure I have got a legal case with them, but what can I possibly get out of it since I did not suffer any damage, it was only my time.

[Jeff-TheBiz]

Payments being in 3 month chunks would show on your credit rating.

Yikes, never thought about that...

Did you ever get a new ownership from them? With your name on the 'vehicle ownership' side?

[EvilEric]

Do you have anything in writing from Prima saying they received your buyout and that the car was now yours?

[ecokenny]

Yikes, never thought about that...

Did you ever get a new ownership from them? With your name on the 'vehicle ownership' side?


Yes I did receive my new vehicle registration with my name on it the next day after I gave them the bank draft to payoff the lease. The new ownership paper stated my name (no Mazda Credit's name) That's why I didn't suspect anything would go wrong until after a year the statements are still coming in...

[ecokenny]

Do you have anything in writing from Prima saying they received your buyout and that the car was now yours?

Yes, I have received a purchase agreement saying I much I paid to buyout the lease on the same day when I paid off my lease. You know the one that normally has 3 layers, white/yellow/pink...and I got the pink copy.

I even checked with my bank, and they told me the bank draft was cashed...but when Mazda Credit claims they haven't received it, then we pretty much can figure out who would have cashed it.

[b]

I have just pulled my credit report yesterday and thank god there is no signs of missing payments. They must have ways to get around so that even payments were made every 3 months, it is still not affecting my credit history.

I am sure I have got a legal case with them, but what can I possibly get out of it since I did not suffer any damage, it was only my time.

Your time... That is damage! If this was me... I would be stressed out & not sleeping well wondering if the dealership would go bankrupt like you stated...

I am not one to take legal action... It just isn't in my blood... but however... I do think you have a valid case. If it was me... I'd want this cleared up asap. You've been had. They should now be making it up to you big time. They f7cked you over!

[ecokenny]

Your time... That is damage! If this was me... I would be stressed out & not sleeping well wondering if the dealership would go bankrupt like you stated...

I am not one to take legal action... It just isn't in my blood... but however... I do think you have a valid case. If it was me... I'd want this cleared up asap. You've been had. They should now be making it up to you big time. They f7cked you over!

Thank you for your support.

For now, I would like everyone out there to be aware of such potential issue Mazda has and perhaps anyone who had bought out their leases should contact Mazda Credit to ensure their payoff money were handled properly.

[brecker]

Sad way to make a quick buck!

If dealerships are so concerned about the public's negative view of them - why do this shit? This is just another sad reminder of dealership reality :whoa I miss my Saturn, well... Saturn dealership..

[ecokenny]

Sad way to make a quick buck!

If dealerships are so concerned about the public's negative view of them - why do this shit? This is just another sad reminder of dealership reality :whoa I miss my Saturn, well... Saturn dealership..

Saturn was good. They always promote one-price policy if I remember correctly from the last time (a few years ago) when I visited a Saturn dealership. So you don't worry getting ripped from one dealer decides to charge you a higher profit margin than the other dealer.

[Garu]

That is so wrong in so many levels.

[3GFX]

Wow, I hope everything turns out for you. That's horrible. You could probably sue for the interest.

[ecokenny]

Wow, I hope everything turns out for you. That's horrible. You could probably sue for the interest.

I agree as I totally believe I have a legal case against them. But think about what is the legal cost that might incur before I can even bring it to court, and how much can I get back in return if I do win. Cost is just way higher than the benefit.

[3GFX]

Well depending on your deposit and the period of time, it might just be worth it. It depends I guess.

[ecokenny]

Well depending on your deposit and the period of time, it might just be worth it. It depends I guess.

It was $20k+ for a year.......I truly believe Mazda Canada should compensate me because I discovered a flaw in their internal procedures that could have led them to potential losses and lawsuits.....they should really give me a job as their auditor since their own useless auditor couldn't even discover such a flaw in their company.

[mazidane]

That is very scary, but the question is, is it illegal in any way or simply irresponsible?

More like having no Integrity or Proper Work Ethic! If Mazda Canada does not do anything about this, going to the Media, Silverman Helps etc, would probably be a good idea to get them doing something to resolve the matter!

I'm hoping Mazda Canada holds their dealership network accountable, lets see how they treat your case!

[ecokenny]

More like having no Integrity or Proper Work Ethic! If Mazda Canada does not do anything about this, going to the Media, Silverman Helps etc, would probably be a good idea to get them doing something to resolve the matter!

I'm hoping Mazda Canada holds their dealership network accountable, lets see how they treat your case!

Actually when I contacted Mazda Canada, the assistant to the president said it has nothing to do with Mazda Canada. It was basically an issue with Mazda Credit. But he will act on as an intermediary to initiate all the contact to Mazda Credit and the regional management.

Yeah, Silverman Help sounds like to go idea. Thank you.

[MAZDA Kitten]

wowwwwwwwwwwwwwwwww
http://www.thisaremusic.com/wp-content/uploads/2006/03/simon.jpg
thats so shady!!!!!!!
Imagine how many other customers they must be doing this to??

Please keep us posted on your progress
I had the privleage of talking to the VP of Mazda Canada and I can tell you he was an awesome person to deal with so at the end of the day I think corporate Mazda Canada IS listening

Good luck!

[MAZDA Kitten]

+1

http://www.citynews.ca/images/shows/silvermn.jpg

[howitts_done]

WOW! I wonder how many other people they have done that too or how many other dealers use the same practices? I sure hope Mazda Canada / Mazda Credit look in to that.
Out of curiosity how much interest do you think they earned?

[ecokenny]

WOW! I wonder how many other people they have done that too or how many other dealers use the same practices? I sure hope Mazda Canada / Mazda Credit look in to that.
Out of curiosity how much interest do you think they earned?

Interest on my lease was like 6% and based on a conversation I had with a bank manager that I previously worked for, we estimated business operating line of credit (where business borrows money to operate their business) charges anywhere between 8-12% in interests in a year. Let say 10% to be fair, minus the 6% they have to pay on my lease...netting them 4% surplus per year. I still had 2.5 years left on my lease contract that time.... $20,000 x 4% x 2.5 years = about $1000.

Doesn't seem too much IF they are only doing this on one vehicle, but number can become significant based on how many vehicles are involved.

[ecokenny]

wowwwwwwwwwwwwwwwww
http://www.thisaremusic.com/wp-content/uploads/2006/03/simon.jpg
thats so shady!!!!!!!
Imagine how many other customers they must be doing this to??

Please keep us posted on your progress
I had the privleage of talking to the VP of Mazda Canada and I can tell you he was an awesome person to deal with so at the end of the day I think corporate Mazda Canada IS listening

Good luck!

Well, I guess this is just one of those BAD APPLES....My family owned and still owns a number of Mazda vehicles, the oldest being a 1994 MX6 V6, everything still running fine, with most of the things like A/C, Engine, Transmission being original. We trust that Mazda will handle this professionally.

[gofish]

ecokenny: Sounds like you had a bad experience but everyone seems to be making quite a few assumptions, and everyone knows what happens when you assume something. It seems to me like Prima Mazda if they were doing what everyone says they were was taking a significant risk for very little return. I don’t think they would jeopardize their reputation on making a few bucks. Have you contacted the dealer to voice your concerns? Is the leasing Manager still employed by Prima Mazda you say his name is still on the website but that doesn’t mean he is still there. Most businesses don’t update the websites everyday. As for suing them I’m no lawyer but if you didn’t loose any money I don’t think you can get anything. This isn’t the U.S. were you can sue anyone for no good reason, not yet anyway. (Thank god)

As for your interest if your lease was at 6% you were assuming that they borrow money at a higher rate than that. I’m an accountant and we get our money at Prime at the moment prime is 6% my own personal line of credit is prime +2% and not myself or my company has more money than Prima Mazda (Now I’m assuming, but I know my financial situation and it’s not a stretch to believe they have more money than me. LOL) Anyway my point is you say this happened a year ago at that time I think prime was at 5% to 5.5% so that means it would have cost them money to not payout your lease.

It doesn’t sound like you talked to the dealer at all. Why don’t you contact the manager and see what they have to say?

[ecokenny]

ecokenny: Sounds like you had a bad experience but everyone seems to be making quite a few assumptions, and everyone knows what happens when you assume something. It seems to me like Prima Mazda if they were doing what everyone says they were was taking a significant risk for very little return. I don’t think they would jeopardize their reputation on making a few bucks. Have you contacted the dealer to voice your concerns? Is the leasing Manager still employed by Prima Mazda you say his name is still on the website but that doesn’t mean he is still there. Most businesses don’t update the websites everyday. As for suing them I’m no lawyer but if you didn’t loose any money I don’t think you can get anything. This isn’t the U.S. were you can sue anyone for no good reason, not yet anyway. (Thank god)

As for your interest if your lease was at 6% you were assuming that they borrow money at a higher rate than that. I’m an accountant and we get our money at Prime at the moment prime is 6% my own personal line of credit is prime +2% and not myself or my company has more money than Prima Mazda (Now I’m assuming, but I know my financial situation and it’s not a stretch to believe they have more money than me. LOL) Anyway my point is you say this happened a year ago at that time I think prime was at 5% to 5.5% so that means it would have cost them money to not payout your lease.

It doesn’t sound like you talked to the dealer at all. Why don’t you contact the manager and see what they have to say?


Hey gofish, thank you for the detailed reply.

Well althought I did not mention in my thread, I indeed have contacted the leasing manager but he failed to return my call after I have personally spoken to him regarding my problem. I then proceeded to escalating to Ron Romano President of Mazda Canada.

Rates - 2006

Prime Rate
Date Rate
Jan 25 5.25%
Mar 08 5.50%
Apr 26 5.75%
May 25 6.00%


Rates - 2005

Prime Rate
Date Rate
September 8 4.50%
October 19 4.75%
December 07 5.00%

I agree with your calculation as it seems to be consistant with our historical rates. However, as you mentioned, interest rates are determined on a case to case situation where to obtaina prime lending rate, most likely there had to be colleteral held as securities. I don't know how well Prima is standing in terms of credit worthiness nor if they have any colleterals. Assuming they are borrowing at P+2% which is around 7-8%, I mean they are still better off. But yeah, I have to agree with you why would they want to jeopardize their valuable reputation for a minimal benefit.

When you see smoke, there has to be a fire. There had to reasons behind their act.

[TheProfessor]

If the leasing manager hasn't called you back ask to speak to his boss. I would not give up on trying to get some answers from Prima if I were.

[Jeff-TheBiz]

I then proceeded to escalating to Ron Romano President of Mazda Canada.



BTW, His name is Don Romano

[gofish]

ecokenny: Believe me when I say if my business can get loans at prime they should be getting that or better. Remember they are dealing with millions of dollars in inventory. I agree with the professor call his boss. Even thou they have Mazda on their building they are owned by individuals and if something funny is going on I’m sure they would like to know about it. I don’t think they would stand for it. Remember there are lots of sales people out there some are good some are bad. Like any other job there are good and bad e.g. good cops and bad, good contractors and bad, 1 good politician bad lots of bad politicians. (LOL)

[Prima_Deals]

To all members

Some members know me and I am a very straight forward guy. This situation has been dealt with and Warren no longer works for the company, and he hasn't for about 6 months now. I have given my General Manager EcoKenny's contact information so this can be resolved but no phone # was give only an email address. I thought a phone # would have been given so he can speak directly to the General Manager. If this had happened to me I would be in the dealership not writing about on a forum. That is all I will say regarding this.

Dennis DiBiase
Fleet Manager
Prima Mazda
dennis@primamazda.ca

[Caz]

It doesn't matter if he still works there or not it is a reflection of the dealership and as they say, one bad apple......

That said, thanks for forwarding the info Dennis.

[Cardinal Fang]

To all members

If this had happened to me I would be in the dealership not writing about on a forum. That is all I will say regarding this.


It's easy to criticize the actions of another when you have the luxury of hindsight. I may have done the same thing you just recommended but I would have still posted the incident as a warning to others. Unless the person posted inaccurate information about the incident he has every right to post what had occurred. We all benefit from this board because of the flow of information back and forth. Good and Bad.

My lawyers have advised me to no longer comment in this thread.

[ecokenny]

It's easy to criticize the actions of another when you have the luxury of hindsight. I may have done the same thing you just recommended but I would have still posted the incident as a warning to others. Unless the person posted inaccurate information about the incident he has every right to post what had occurred. We all benefit from this board because of the flow of information back and forth. Good and Bad.

My lawyers have advised me to no longer comment in this thread.

Thank you for all of your advises.

This incident was reported to the President Don Romano of Mazda Canada and Mazda Credit was also involved in resolving this problem. The letter I sent to the President was sent out early December 2006. So far, I have only received one letter from the president's office regreting to have heard me having such difficult situation with the dealership and they would review and investigate such issue internally.

It is going to be 4 months next week since I have reported such incident, and I have not yet heard from anyone from Prima. Yes, I appreciate Dennis for the initiation of contact but it is not until I have posted this thread. I am certain that Prima's GM was aware of such issue, but had never taken the initiative to contact me for discussion. Prima has my contact info on file their file since I started out leasing the vehicle at the beginning.

Incident is 100% accurate. I have every documents from the purchase agreement, bank draft with endorsement indicating who had negotiated it, letter I have sent to the President and the reply from the President's office.

[gofish]

I didn’t notice in your thread the results of you contacting Mazda Canada. Is your lease still open or has it been paid out?

[ecokenny]

I didn’t notice in your thread the results of you contacting Mazda Canada. Is your lease still open or has it been paid out?

One thing I must say out of this ordeal, Mazda Canada and Mazda Credit have been very professional and efficient in handling my case. They finally sent me a "Payout Confirmation" a week after I initiated my dispute with them. Thumbs up. Just that it is a year after Prima received my $$$.

The lease was still open at the time I contacted Mazda Credit. It took me a number of faxes, trips back and forth to the bank, a few sleepless nights and phone conversations with four different persons prior to getting this resolved. Reasons for taking this long was because I need to provide documents to prove my payments since Mazda Credit had none of these documents simply because they were never forwarded there.

Lesson learned.....never throw away your receipts.

[Caz]

I really hope you get some form of compensation for all this.

[gofish]

So how long after you contacted Prima Mazda was your lease paid?

[ecokenny]

So how long after you contacted Prima Mazda was your lease paid?

I contacted the leasing manager and he promised to get back to me the next day. Once he failed to respond, I proceeded to approach Mazda Canada head office.

[gofish]

You say that this issue is resolved, So how long did it take to resolve the whole issue? From when you contacted Mazda Canada to when it was paid out?

[ecokenny]

You say that this issue is resolved, So how long did it take to resolve the whole issue? From when you contacted Mazda Canada to when it was paid out?

Hi Gofish,

Please refer to my thread #42 as it has been discussed.

[gofish]

The lease was still open at the time I contacted Mazda Credit. It took me a number of faxes, trips back and forth to the bank, a few sleepless nights and phone conversations with four different persons prior to getting this resolved. Reasons for taking this long was because I need to provide documents to prove my payments since Mazda Credit had none of these documents simply because they were never forwarded there.


Maybe I'm not reading this right but from the time you contacted Mazda Canada Credit to the time it was paid out by Prima it took a few days. Is that correct?

That doesn't seem unreasonable and again I'm assuming but it seems like from the post that Dennis gave the leasing Manager Warren was to blame and he was let go because of this. If thats the case I think Prima should be comended for their swift action 1) resolving your payout issue and 2) Getting rid of a bad apple.

[ecokenny]

Issue has been resolved as I had the opportunity to speak to the general manager Mr. Said Elfiki at Prima Mazda. Please see my link to the resolution.

http://www.torontomazda3.ca/forum/showthread.php?t=17328

:lock