OMVIC OMVIC Code of Ethics Scenarios 1

Question 1

A salesperson at a dealership discovers that a used vehicle they are about to sell has undisclosed previous frame damage.
The manager says to ignore it and close the deal.
What is the ethically required action under the OMVIC Code of Ethics?

Accepted Answer

Disclose the frame damage to the buyer before the sale proceeds

Answer

Follow the manager's instruction since it is a business decision

Answer

Reduce the price slightly to compensate the buyer without mentioning the damage

Answer

Transfer the file to another salesperson to avoid personal liability

Question 2

A dealership salesperson is negotiating with a buyer and knows the vehicle was previously used as a daily rental. Under the OMVIC Code of Ethics, the salesperson must:

Accepted Answer

Disclose the prior daily-rental use to the buyer before purchase

Answer

Mention the prior use only if the buyer specifically asks

Answer

Lower the price instead of verbally disclosing the use

Answer

Record the prior use in the internal file but not tell the buyer

Question 3

A registered motor vehicle dealer receives a written complaint from a consumer alleging misrepresentation. According to the OMVIC Code of Ethics, the dealer should:

Accepted Answer

Respond to the complaint promptly and professionally, attempting fair resolution

Answer

Ignore the complaint unless a formal OMVIC investigation is opened

Answer

Advise the consumer to retain a lawyer before any response is given

Answer

Deny all allegations in writing without reviewing the file

Question 4

A salesperson is also a part-owner of an auto auction business. A customer is considering buying a vehicle that the salesperson recently sourced from that auction. What does the OMVIC Code of Ethics require?

Accepted Answer

Disclose the conflict of interest to the customer before completing the sale

Answer

Recuse themselves from the sale and reassign it to a colleague without disclosure

Answer

Proceed with the sale normally since the vehicle's condition is unaffected

Answer

Disclose the conflict only in the written contract, not verbally

Question 5

A customer becomes upset during negotiation and raises their voice. The salesperson, to end the confrontation quickly, tells the customer the vehicle has never been in an accident, which the salesperson has not confirmed. This conduct violates the OMVIC Code of Ethics because:

Accepted Answer

Making unverified representations about vehicle history is misrepresentation

Answer

Salespeople are not permitted to speak to upset customers without a manager present

Answer

Verbal statements about accidents are only binding if the vehicle is over $10,000

Answer

The statement only becomes a violation once it is repeated in writing

Question 6

A dealership's finance manager presents a consumer with an extended warranty that has been automatically included in the contract without prior discussion. When the consumer questions it, the finance manager says it is mandatory. This behaviour violates the OMVIC Code of Ethics because:

Accepted Answer

Including unauthorized products in a contract without consent is deceptive and unethical

Answer

Extended warranties may only be offered after a test drive has been completed

Answer

Finance managers are not permitted to discuss warranties without a licensed salesperson present

Answer

Warranties are only mandatory if the vehicle is under three years old

Question 7

During a trade-in appraisal, a salesperson notices the customer's vehicle has significant rust damage that the customer has not mentioned. The salesperson plans to use this undisclosed information to lowball the trade-in without telling the customer what was found. Is this consistent with the OMVIC Code of Ethics?

Accepted Answer

No, because registrants must deal honestly and not exploit information asymmetry to the consumer's detriment

Answer

Yes, because appraisal negotiations are competitive and dealers are not required to disclose inspection findings

Answer

Yes, because the customer is responsible for knowing the condition of their own vehicle

Answer

No, but only if the rust damage results in a trade-in reduction greater than $2,000