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A $5 million class action lawsuit against the defunct vehicle consignment company Treadz Auto Group Inc has been certified by a Calgary judge.
The Treadz Auto class action lawsuit accuses the owner, Sean O’Brien, of cheating clients out of more than $2 million. O’Brien allegedly failed to pay owners when their vehicles were sold and failed to remove liens from their vehicles.
O’Brien was reportedly sentenced to three years in prison in 2018 after he pleaded guilty to criminal charges for two counts of fraud over $5,000. He originally faced 164 charges of fraud and theft.
According to the Treadz Auto class action lawsuit, around 100 people paid $299 each and signed contracts with Treadz Auto between 2011 and 2014 to sell their vehicles on consignment.
Once the vehicles were sold, Treadz Auto allegedly failed to compensate the owners for the sale. In some cases, the owners were not told that their vehicles had sold. Many weren’t paid what they were owed for the sale, according to the Treadz Auto class action lawsuit.
O’Brien’s fraud also involved the registration of dozens of vehicles in the Treadz Auto name by using fraudulent documents to get a loan for almost $500,000 from a credit company. The loan was never repaid, according to CBC.
Plaintiffs Andrea Scherle and Stacy Rachkewich both claim that Treadz Auto owes them tens of thousands of dollars. Scherle says Treadz sold her Dodge Ram truck for $53,500, which should have paid off the financing owed to her lender, but Treadz Auto allegedly never paid her the money.
Rachewich claims Treadz Auto owes him nearly $20,000, the bulk of which was for a Scotiabank financing buyout.
The Alberta Motor Vehicle Industry Council issued O’Brien a license to sell cars in 2004 despite a criminal history dating back to 1993 for “car theft-related charges,” CBC.ca reports.
Customers began to complain about Treadz starting the same year O’Brien got his license to sell vehicles, but they were relatively infrequent and most of the issues were resolved quickly, CBC.ca notes.
As the number of customer complaints to the AMVIC increased, the regulatory agency began investigating the situation. They revoked O’Brien’s license in August 2014.
The Treadz Auto class action lawsuit initially accused AMVIC of failing to protect them from the consignment company’s misconduct. However, Court of Queen’s Bench Justice Glenda Campbell dismissed the allegations against the regulatory agency after determining they did not owe the plaintiffs a duty of care. She also dismissed the charges against Service Alberta for allegedly failing to properly oversee AMVIC.
Campbell determined that there was not enough to support the claims that the two regulatory agencies were liable for regulatory negligence.
A trial date for the Treadz Auto class action lawsuit has not yet been set.
Were you ever duped by Treadz Auto? Let us know in the comments below.
The plaintiffs are represented by Craig Aitken of Knight LLP.
The Treadz Auto Group Fraud class action lawsuit is Andrea Scherle, et al. v. Treadz Auto Group Inc., et al., Case No 1501 06687, in Court of Queen’s Bench of Alberta, Canada.
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