OMVIC Code of Ethics Scenarios Flashcards

A salesperson at a franchised dealership discovers that a used vehicle on the lot was previously used as a daily rental but the CarProof report does not flag it. The dealer principal instructs the salesperson not to mention it because 'it's not legally required if the report doesn't show it.' Under the OMVIC Code of Ethics, what should the salesperson do?

Answer: Disclose the rental history to the customer regardless of the CarProof result, because the Code of Ethics requires honest dealing beyond minimum legal thresholds

The OMVIC Code of Ethics requires registrants to act with honesty and integrity and to disclose all known material facts — not merely what a third-party report captures. Known rental history is a material fact that could affect a buyer's decision, so the salesperson must disclose it even if the CarProof is silent. Following an employer's instruction to suppress a known material fact violates the registrant's personal ethical obligation.

A dealership advertises a vehicle at $24,995 'plus applicable taxes.' At delivery, the buyer is presented with a bill that includes a $499 'documentation fee,' a $299 'dealer admin fee,' and a $199 'nitrogen tire fee' — none of which were disclosed in the advertisement or during negotiations. Which statement best reflects the OMVIC Code of Ethics position on these charges?

Answer: Only government-mandated fees may be added after the advertised price; dealer-imposed fees must be included in the advertised price or clearly disclosed before purchase

Under OMVIC's advertising standards and Code of Ethics, the advertised price must be all-inclusive of dealer-imposed fees. Charges like documentation fees, admin fees, and nitrogen fees are not government-mandated taxes or levies — they are dealer costs that must be built into the advertised price or explicitly disclosed upfront. Surprising a buyer at delivery with these fees violates the prohibition on misleading advertising and unfair practices.

A registered salesperson moonlights on weekends helping a private individual sell that person's personal vehicle by acting as an intermediary and negotiating the deal with potential buyers. No OMVIC registration exists for this activity. Under the Code of Ethics and OMVIC Act, which of the following is the most accurate statement?

Answer: This constitutes acting as a curbsider and is a violation regardless of whether the salesperson accepts payment

Curbsiding — facilitating the sale of a vehicle on behalf of another party without proper OMVIC registration as a dealer — is prohibited. A registered salesperson who acts as an intermediary for a private seller is engaging in the trade of motor vehicles outside of their registered dealership, which violates their registration conditions and the Code of Ethics regardless of whether they receive compensation. The 'three vehicle' threshold applies to private individuals, not to registered salespersons acting outside their scope.

During a negotiation, a customer mentions they are going through a divorce and are emotionally distressed, saying they 'just need a car quickly and will pay whatever it takes.' The salesperson uses this information to present only the highest-margin vehicle on the lot without showing alternatives and quotes a price $3,000 above what the dealership regularly accepts. Under the OMVIC Code of Ethics, this conduct is best characterized as:

Answer: A potential violation of the unfair practice provisions, as the salesperson is taking advantage of a consumer's known vulnerability

The OMVIC Code of Ethics and Ontario's Motor Vehicle Dealers Act incorporate protections against unfair practices, including exploiting a consumer's known vulnerability, emotional distress, or urgent circumstances. Deliberately withholding alternatives and inflating the price after learning the customer is in a distressed state constitutes an unfair practice. The ethical breach occurs at the point of conduct — it does not require a complaint to be filed to be a violation.

A finance manager at a dealership submits a credit application to a lender on behalf of a customer but inflates the customer's stated annual income by $8,000 to improve approval odds, rationalizing that the customer 'verbally mentioned' side income that wasn't documented. The customer did not authorize or review this change. Under the OMVIC Code of Ethics, this conduct:

Answer: Is a serious ethical violation constituting misrepresentation and potential fraud, regardless of the customer's actual income

Submitting false or altered financial information to a lender — even with a rationalization about undisclosed income — constitutes misrepresentation and is a fundamental breach of the OMVIC Code of Ethics. Registrants are required to deal honestly with all parties, including lenders. This conduct could also constitute fraud under criminal law. The outcome of the loan (whether the customer defaults) is irrelevant to whether the ethical violation occurred; the wrongdoing is in the act of falsification itself.

A salesperson's customer has signed a purchase agreement and paid a $1,000 deposit. Two days later, before taking delivery, the customer calls to cancel citing a family emergency. The dealer principal instructs the salesperson to tell the customer the deposit is 'fully non-refundable under any circumstances' and refuses to review whether the cancellation grounds merit any refund consideration. The salesperson knows this blanket statement may not reflect the legal position. Under the OMVIC Code of Ethics, the salesperson should:

Answer: Advise the customer that deposit policies vary and suggest the customer seek independent legal advice, rather than making a definitive legal claim on the dealer's behalf

The OMVIC Code of Ethics requires registrants to deal fairly and honestly. Making a definitive legal claim to a consumer — that a deposit is 'fully non-refundable under any circumstances' — when the salesperson has reason to believe this may not be accurate constitutes a misrepresentation. The ethical course is to avoid making misleading legal assertions and to direct the customer to seek independent advice. The salesperson is not obligated to override the dealer principal's business decision, but they must not personally make false or misleading statements to a consumer.