OMVIC OMVIC Code of Ethics Scenarios 5 — Questions and Answers
Question 1: A registered salesperson's friend is a body shop owner who pays the salesperson a referral fee each time a customer is directed to the shop for repairs. The salesperson recommends the shop to every buyer but never discloses the referral arrangement. This conduct:
- Violates the Code of Ethics because the undisclosed financial interest creates a conflict of interest (Correct answer)
- Is acceptable because the referral is a private arrangement between the salesperson and the shop
- Is permissible as long as the body shop provides quality work
- Only requires disclosure if the shop is also an OMVIC registrant
Correct answer: Violates the Code of Ethics because the undisclosed financial interest creates a conflict of interest
An undisclosed financial benefit that influences advice given to consumers is a conflict of interest requiring disclosure under the Code of Ethics.
Question 2: A dealership advertises a vehicle on a third-party website listing 'leather seats' as a feature. The vehicle actually has leatherette (synthetic) upholstery. Upon noticing this during a test drive, the salesperson says nothing. This is:
- Unethical because failing to correct a known material misrepresentation in advertising is a violation of the Code (Correct answer)
- Acceptable since leatherette is a reasonable equivalent and consumers should inspect vehicles themselves
- A violation only if the consumer specifically asked about the seat material
- Not a Code of Ethics issue since advertising errors are handled exclusively under the Competition Act
Correct answer: Unethical because failing to correct a known material misrepresentation in advertising is a violation of the Code
The Code of Ethics requires registrants to ensure representations in all advertising are accurate and to correct known errors; silence when aware of a material inaccuracy is itself deceptive.
Question 3: A consumer is financing a vehicle and asks the salesperson what the interest rate is. The salesperson quotes only the promotional buy-down rate but does not mention that the rate will increase to 9.9% after six months. This conduct:
- Violates the Code of Ethics because omitting material financing terms creates a misleading impression (Correct answer)
- Is acceptable since the full terms appear in the finance contract the consumer will sign
- Is permissible because promotional rates are standard and widely understood by consumers
- Only becomes an issue if the consumer cannot make payments after the rate increases
Correct answer: Violates the Code of Ethics because omitting material financing terms creates a misleading impression
Omitting material terms that would affect a consumer's financial decision, such as a future rate increase, is a form of deception contrary to the duty of honest dealing.
Question 4: A principal dealer is aware that one of their registered salespersons has been making false statements to customers about warranty coverage. The principal takes no action. Under OMVIC's regulatory framework:
- The principal is responsible for supervising registrants and may be held accountable for failing to address known misconduct (Correct answer)
- Only the individual salesperson is liable since the principal did not personally make the statements
- OMVIC can only discipline the principal if the false statements were in writing
- The principal is exempt from liability if they were not present during the transactions
Correct answer: The principal is responsible for supervising registrants and may be held accountable for failing to address known misconduct
Under the MVDA, principal dealers have supervisory responsibilities; knowingly allowing misconduct without corrective action exposes the principal to regulatory liability.
Question 5: A consumer who purchased a vehicle two weeks ago calls the dealership to report a serious undisclosed mechanical defect. Under the Code of Ethics, the salesperson should:
- Take the complaint seriously, engage professionally, and work with the consumer toward a fair resolution (Correct answer)
- Inform the consumer that all sales are final and the vehicle was sold in as-is condition
- Direct the consumer to contact their insurance company rather than the dealership
- Advise the consumer to bring the vehicle to the manufacturer's authorized service centre
Correct answer: Take the complaint seriously, engage professionally, and work with the consumer toward a fair resolution
The Code of Ethics requires professionalism and fair dealing, including a genuine good-faith effort to address legitimate post-sale complaints about undisclosed defects.
Question 6: A dealership's salesperson inflates the appraised value of a consumer's trade-in on paper while simultaneously reducing the selling price by the same amount, to make the deal appear more favourable than it is. This is:
- Deceptive because it misrepresents the true economic terms of the transaction to the consumer (Correct answer)
- Acceptable because the net cost to the consumer is unchanged
- Permissible if both the salesperson and consumer verbally agree to the arrangement
- A violation only if it triggers a tax liability for the consumer
Correct answer: Deceptive because it misrepresents the true economic terms of the transaction to the consumer
Inflating numbers to create a false impression of value, even if net cost is identical, is a deceptive practice prohibited under the Code of Ethics and consumer protection law.
Question 7: A customer is purchasing a vehicle and asks if there are any recalls on it. The salesperson checks and finds one open recall but tells the customer 'no recalls.' This violates the Code of Ethics because:
- Stating there are no recalls when one is open is a direct false statement about a material safety fact (Correct answer)
- Recall information is only required to be disclosed when the manufacturer issues a safety bulletin
- The salesperson is not legally required to check recall databases and bears no liability for omission
- The violation only arises if the recall relates to a critical safety component
Correct answer: Stating there are no recalls when one is open is a direct false statement about a material safety fact
Giving a false answer to a direct consumer question about an open safety recall is a clear misrepresentation of a material safety fact, violating the Code of Ethics.
OMVIC OMVIC Code of Ethics Scenarios 5
A registered salesperson's friend is a body shop owner who pays the salesperson a referral fee each time a customer is directed to the shop for repairs.
The salesperson recommends the shop to every buyer but never discloses the referral arrangement.
This conduct: