What he said. Sounds like the first dealership didn't do squat. I'd be making a call to my local (or their local) Consumer Affairs department with the government (like the DA or the police - probably in the "blue pages" of the phone book).
The second dealership is right - the Ford system is called OASIS, and all recall work is entered through there for the reason they told you. Stick with the second dealership if you can for any future work - they sound reputable (something of a rarity for a Ford dealership). The first dealer is NOT, and the local mechanic just sounds unfamiliar with Contours (not fraudulent).
