OMVIC OMVIC Code of Ethics Scenarios 3 — Questions and Answers
Question 1: A salesperson at a used car lot tells a customer that the odometer reading of 85,000 km is accurate, but the salesperson has not verified this with a UVIP or any documentation. This statement may violate the Code of Ethics because:
- Registrants must not make unverified representations about material facts such as odometer readings (Correct answer)
- Odometer accuracy can only be verified by a licensed mechanic, not a salesperson
- The statement is only a violation if the vehicle has had an odometer rollback of more than 5,000 km
- Verbal statements about odometer readings are not covered by the Code of Ethics
Correct answer: Registrants must not make unverified representations about material facts such as odometer readings
The Code of Ethics requires that all representations about material facts be accurate and verifiable; asserting unverified odometer accuracy is a misrepresentation risk.
Question 2: A consumer is buying a vehicle and the salesperson realizes there is a lien registered against it that the dealer has not yet discharged. The salesperson should:
- Inform the consumer of the outstanding lien before the sale is finalized (Correct answer)
- Proceed with the sale and discharge the lien from the sale proceeds without telling the consumer
- Allow the consumer to discover the lien through their own PPSA search
- Have the consumer sign a waiver acknowledging they accept all encumbrances
Correct answer: Inform the consumer of the outstanding lien before the sale is finalized
Selling a vehicle with an undisclosed lien is contrary to honest dealing and could leave the consumer with an encumbered asset; disclosure before completion is ethically required.
Question 3: After a sale is completed, a customer returns complaining the vehicle was misrepresented. The dealer's salesperson refuses to communicate with the customer and hangs up the phone. This conduct violates which principle of the OMVIC Code of Ethics?
- Professionalism and the obligation to handle consumer complaints in a respectful and responsive manner (Correct answer)
- The MVDA registration requirement, because only principals may handle complaints
- The advertising standards, because the dealer must post a complaints policy on their website
- The requirement to submit all consumer disputes to OMVIC arbitration within 30 days
Correct answer: Professionalism and the obligation to handle consumer complaints in a respectful and responsive manner
The Code of Ethics requires registrants to behave professionally at all times, including when dealing with dissatisfied customers; refusing to engage with a complaint is unprofessional conduct.
Question 4: A dealership owner instructs their salesperson to describe a vehicle as 'accident-free' in all verbal and written communications, even though the owner knows it was in a minor collision. The salesperson who follows this instruction:
- Is personally in violation of the Code of Ethics regardless of the instruction from ownership (Correct answer)
- Bears no personal responsibility since they were acting under the owner's direction
- Is only liable if they knew the vehicle had been in an accident themselves
- May proceed because minor collisions need not be disclosed under the MVDA
Correct answer: Is personally in violation of the Code of Ethics regardless of the instruction from ownership
Each registered salesperson is individually responsible for their own representations; following an instruction to misrepresent does not insulate a registrant from personal liability.
Question 5: A consumer who cannot afford the listed price asks the salesperson to falsify their income on a financing application to qualify for a loan. The salesperson should:
- Refuse and explain that falsifying a credit application is illegal and unethical (Correct answer)
- Proceed since the consumer has full knowledge and has consented
- Submit the application as requested but document the consumer's request in the file
- Refer the consumer to the finance manager, who is authorized to adjust income figures
Correct answer: Refuse and explain that falsifying a credit application is illegal and unethical
Falsifying a financing application is fraud; the Code of Ethics and the law prohibit registrants from participating in or facilitating fraudulent conduct regardless of consumer consent.
Question 6: A salesperson is simultaneously representing both the buyer and the seller in the same private-sale facilitation transaction at the dealership. What does the Code of Ethics require?
- Full disclosure of the dual representation to both parties and their informed consent (Correct answer)
- No disclosure is necessary since the salesperson is only facilitating, not advising
- The salesperson must choose one party to represent and decline to assist the other
- Dual representation is prohibited outright under the MVDA and cannot be consented to
Correct answer: Full disclosure of the dual representation to both parties and their informed consent
The Code of Ethics requires that conflicts of interest, including dual representation, be fully disclosed so that all parties can give informed consent.
Question 7: A customer is pressured by a salesperson into signing a purchase agreement immediately, being told 'this price disappears in one hour and another buyer is waiting.' In reality, no competing buyer exists. This sales tactic:
- Violates the Code of Ethics by using false urgency to pressure a consumer into a decision (Correct answer)
- Is permitted as a standard negotiation technique if no written claim is made
- Is acceptable only if the consumer is given a 10-minute cooling-off period after signing
- Does not violate the Code since the salesperson's statements are not warranties about the vehicle
Correct answer: Violates the Code of Ethics by using false urgency to pressure a consumer into a decision
The Code of Ethics prohibits high-pressure, deceptive tactics; fabricating competing buyers to coerce a decision is misrepresentation that violates the duty of honest dealing.
OMVIC OMVIC Code of Ethics Scenarios 3
A salesperson at a used car lot tells a customer that the odometer reading of 85,000 km is accurate, but the salesperson has not verified this with a UVIP or any documentation.
This statement may violate the Code of Ethics because: