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Johannesburg - A well-known South African franchise has been caught in the middle of a major car-selling scam.
At least 24 unhappy customers have laid complaints over the last few months against Cash Converters Wheels in Randburg after claiming the dealership owed them substantial amounts of money.
Cash Converters Wheels in Oak Avenue is one of several branches throughout the country and is a subsidiary of Cash Converters Southern Africa (Pty) Ltd (CCSA). The Wheels stores market and sell vehicles on behalf of customers.
Now dozens of people have come forward claiming the Randburg owners owe them money after the cars had been sold. There are other unhappy customers who have already paid for vehicles but never received them.
The store is now deserted.
One of the victims of the scam, Kevin van den Berg, said he had lost all patience with the dealership and was ready to take CCSA to court should he not receive the money owed to him.
Van den Berg has consulted with attorney, Ivan Zartz.
He said he was contacted by someone from Cash Converters Wheels in February this year who had offered to help him market and sell his car after he had advertised it for sale on the classified website, Gumtree.
“Before agreeing, I checked out their website. All seemed legitimate, so I felt at ease.”
Van den Berg visited the store on May 9.
His Mitsubishi Pajero was inspected. He and the owners then completed an induction agreement on a price – R115 000.
“They said all keys must be handed over as they needed to put the car on their display floor.”
A few weeks later he was asked to hand over the car’s registration documents.
Then in mid-May Van den Berg received a call to say the dealership had secured a buyer and that the money would be in his account soon.
That was the last he heard from them.
“I sent numerous e-mails urging them to pay my R115 000, but never heard back from anybody.”
He then placed a complaint on HelloPeter.com, a consumer help site. Shortly afterwards he was contacted by the national operations manager at CCSA.
“They told me that the branch in Randburg had been disenfranchised due to numerous complaints received of a similar nature.”
“I am unsure if I will ever get my money or my car back but I want all these people to be exposed as scammers.”
“We are hoping to bring a class action.”
Meanwhile CCSA, in statement, confirmed the scam, saying the Oak Avenue store’s franchise agreement had been cancelled on April 7.
Richard Mukheibir, managing director of CCSA, said when the store’s owners refused to stop trading as a franchised store, CCSA was compelled to approach the South Gauteng High Court for an urgent order forcing them to stop.
“This is the first time in 21 years we have experienced an issue of this nature. While we appreciate that, from a legal perspective, this is an issue between the ex-franchisee and the customers concerned, we are however committed to assisting and supporting these customers as best we can.”
Mukheibir said CCSA piloted “Wheels” in 2012. A store in Claremont was opened and, more recently on September 1 last year, the Oak Avenue franchise was opened.
The stores are run in a very similar manner to the merchandising formula.
“It’s very difficult at this stage to establish exactly how many customers may have been affected but we are in contact with 20. We have managed to resolve about eight of the complaints.”
CCSA was in contact with one of the owners of the Randburg store but the second owner appeared to have disappeared.
“We would would like to urge other affected customers to contact our head office,” Mukheibir said.