OMVIC OMVIC Code of Ethics Scenarios 2 — Questions and Answers
Question 1: A car salesperson promises a customer that the certified pre-owned vehicle has passed a 150-point inspection when no such inspection has been completed. Under the OMVIC Code of Ethics, this constitutes:
- Misrepresentation, which is a violation of the duty to deal honestly (Correct answer)
- Acceptable sales puffery that is not actionable under the Code
- A breach only if the vehicle later develops a mechanical fault
- A violation only if the claim appears in a written advertisement
Correct answer: Misrepresentation, which is a violation of the duty to deal honestly
The Code of Ethics prohibits all misrepresentations, including verbal false statements about a vehicle's certification or inspection status.
Question 2: A dealership posts an online advertisement for a vehicle at $18,500 but adds $2,800 in undisclosed administrative fees at the point of sale. What does the OMVIC Code of Ethics and MVDA require?
- All fees must be included in the advertised price or clearly disclosed before any agreement is signed (Correct answer)
- Fees may be added at the point of sale provided they are itemized on the bill of sale
- Administrative fees under $3,000 are exempt from pre-disclosure requirements
- Online prices are non-binding and fees may be added at the dealer's discretion
Correct answer: All fees must be included in the advertised price or clearly disclosed before any agreement is signed
Under OMVIC's advertising standards and the Code of Ethics, the total price including all mandatory fees must be disclosed in advertising to prevent deception.
Question 3: A salesperson's personal friend is selling a vehicle through the dealership. The salesperson adjusts the asking price upward to earn a higher commission without the friend's knowledge. This violates the Code of Ethics because:
- Registrants must not use their position to gain an undisclosed financial advantage over any client, including friends (Correct answer)
- Commission adjustments are only permitted with the sales manager's written approval
- Salespersons are not permitted to sell vehicles on behalf of personal acquaintances
- The violation only arises if the friend later discovers the price adjustment
Correct answer: Registrants must not use their position to gain an undisclosed financial advantage over any client, including friends
The Code of Ethics requires registrants to act in the client's best interest and disclose any personal financial interests affecting the transaction.
Question 4: A consumer has signed an agreement to purchase a used vehicle. Before the vehicle is delivered, the salesperson discovers it was previously registered as a salvage vehicle. The salesperson should:
- Immediately disclose the branded title status to the consumer and allow them to reconsider the purchase (Correct answer)
- Complete the sale and disclose the salvage history at delivery only if the consumer asks
- Proceed with delivery since a signed agreement is legally binding on both parties
- Obtain a letter from a mechanic certifying the vehicle is safe before disclosing anything
Correct answer: Immediately disclose the branded title status to the consumer and allow them to reconsider the purchase
Branded title (salvage) status is a mandatory disclosure; discovering it after signing but before delivery still triggers the obligation to immediately inform the consumer.
Question 5: A dealership service technician who is not a registered salesperson is approached by a walk-in customer asking about buying a used vehicle on the lot. The technician begins negotiating a price and promises delivery. Under the Code of Ethics and MVDA:
- Only registered salespersons may conduct vehicle sales negotiations; the technician should refer the customer to a registered registrant (Correct answer)
- Any employee may negotiate a sale since the dealer is responsible for the dealership's conduct
- The technician may negotiate but must have a manager co-sign the agreement
- The technician may proceed if the sale is under $10,000
Correct answer: Only registered salespersons may conduct vehicle sales negotiations; the technician should refer the customer to a registered registrant
Under the MVDA, negotiating the sale of a motor vehicle requires registration with OMVIC; unregistered employees may not conduct sales activities.
Question 6: A registered salesperson suspects a colleague is submitting inflated financing applications on behalf of customers without their knowledge. What does the OMVIC Code of Ethics require the salesperson to do?
- Report the suspected misconduct to OMVIC or dealership management to protect consumers (Correct answer)
- Ignore the conduct since it is the colleague's personal responsibility
- Confront the colleague privately and only escalate if the behaviour continues
- Document the behaviour but take no action unless personally asked by a consumer
Correct answer: Report the suspected misconduct to OMVIC or dealership management to protect consumers
The Code of Ethics requires registrants to uphold the integrity of the industry; knowingly allowing fraudulent conduct without reporting it contravenes the registrant's professional obligations.
Question 7: A dealer is offering a promotional 0% financing deal available to qualified buyers. In advertisements, the dealer mentions only '0% financing available' without stating qualification requirements or the standard rate. This is ethically problematic because:
- Advertising financing terms without material conditions is misleading to consumers (Correct answer)
- Financing promotions may only be advertised once OMVIC has pre-approved the terms
- The 0% rate must be offered to all buyers regardless of creditworthiness
- Financing advertisements must appear only on the dealership's premises, not in media
Correct answer: Advertising financing terms without material conditions is misleading to consumers
OMVIC advertising standards require that material conditions attached to promotional offers such as financing be clearly disclosed to avoid misleading consumers.
OMVIC OMVIC Code of Ethics Scenarios 2
A car salesperson promises a customer that the certified pre-owned vehicle has passed a 150-point inspection when no such inspection has been completed.
Under the OMVIC Code of Ethics, this constitutes: