OMVIC Code of Ethics Scenarios Flashcards

A registered salesperson discovers mid-deal that a used vehicle they are selling has a lien registered against it that the dealer was unaware of. The buyer has already signed the purchase agreement and paid a deposit. According to the OMVIC Code of Ethics, what is the salesperson's correct course of action?

Answer: Disclose the lien to the buyer immediately and allow them to rescind the agreement without penalty

The OMVIC Code of Ethics requires registrants to deal honestly and disclose all known material facts. A lien is a material encumbrance on title that directly affects the buyer's ability to receive clear ownership. The buyer must be informed immediately and given the right to cancel without penalty, as the vehicle cannot be represented as lien-free. Proceeding without offering rescission would constitute a misrepresentation.

A salesperson at a franchised dealership is offered a $500 cash referral fee by an independent finance company if they steer buyers toward that company's financing products. The salesperson does not disclose this arrangement to customers or the dealer principal. Under the OMVIC Code of Ethics, this arrangement is best described as:

Answer: A conflict of interest that violates the duty to act in the consumer's best interest and requires disclosure

The OMVIC Code of Ethics requires registrants to avoid undisclosed conflicts of interest. Accepting secret commissions from a third-party lender while recommending that lender's products to consumers — without disclosing the financial incentive — is a direct conflict of interest. It compromises the registrant's duty to deal honestly and could constitute deceptive dealing, regardless of whether the rates are competitive.

A dealer advertises a vehicle at $24,995 'all-in' on its website. When a consumer arrives, the salesperson reveals the price excludes a mandatory $899 'dealer administration fee' and $349 in nitrogen-filled tire charges. The salesperson argues these are legitimate fees that were listed in fine print. How does OMVIC's Code of Ethics and advertising standards treat this situation?

Answer: The advertisement violates OMVIC standards because all mandatory fees must be included in the advertised price

OMVIC's advertising standards require that the advertised price of a vehicle must include ALL mandatory fees and charges — there are no exceptions for fine print. Dealer administration fees and any other unavoidable charges must be rolled into the headline price. Nitrogen tire fees charged as mandatory are similarly included. This 'all-in pricing' rule prevents bait-and-switch advertising and is a core consumer protection standard under the Code of Ethics.

A consumer purchases a used vehicle and signs a contract that includes a clause stating 'sold as-is, no warranties expressed or implied.' Two days later, the engine fails due to a pre-existing internal fault that a pre-sale inspection would likely have detected. The salesperson was unaware of the fault. Under OMVIC's Code of Ethics, which statement is most accurate?

Answer: An 'as-is' clause does not override the consumer's rights under the Consumer Protection Act, and known latent defects must always be disclosed

Under OMVIC's Code of Ethics and Ontario's Consumer Protection Act, an 'as-is' clause cannot be used to contract out of statutory consumer rights or to avoid disclosure of known material defects. While a salesperson who genuinely did not know about a defect may have a different standing than one who concealed it, the broader principle is that 'as-is' clauses do not eliminate the dealer's legal obligations. Furthermore, dealers have a duty to inspect vehicles they sell, and a pre-existing fault detectable by inspection raises questions about adequate disclosure practices.

A registered salesperson leaves Dealer A and begins working at Dealer B. While at Dealer A, the salesperson developed personal relationships with several clients. The salesperson now contacts those former clients using personal notes taken while employed at Dealer A to solicit business for Dealer B. Under the OMVIC Code of Ethics, what issue does this raise?

Answer: Using confidential customer information obtained while employed at Dealer A for competitive solicitation at Dealer B raises ethical and potentially legal concerns

The OMVIC Code of Ethics requires registrants to act with integrity and honesty. Customer records and contact information compiled while employed at a dealership are considered confidential business assets of that dealer, not personal property of the salesperson. Using such information to solicit former clients for a competing dealership constitutes a breach of confidentiality and potentially violates Ontario's privacy legislation (PIPEDA/PHIPA principles). OMVIC registrants must maintain ethical conduct even in competitive transitions between employers.

A consumer negotiates a vehicle purchase and the contract is signed. Before delivery, the dealer discovers the vehicle's actual acquisition cost was lower than expected, creating additional profit margin. The dealer instructs the salesperson to add a $400 'pre-delivery inspection fee' to the contract that was not in the original signed agreement. The salesperson complies. This scenario most directly violates which OMVIC Code of Ethics principle?

Answer: The obligation to deal honestly and not alter agreed contract terms without the consumer's informed consent

The OMVIC Code of Ethics places a fundamental obligation on registrants to deal honestly and fairly with consumers. Adding charges to a signed contract without the consumer's knowledge and informed consent is a deceptive practice that violates both the Code of Ethics and the Consumer Protection Act. The salesperson is not absolved by following dealer instructions — registrants are personally responsible for their conduct. The salesperson should have refused to comply and, in this case, faced an obligation to protect the consumer's interests rather than the dealer's profit.