Ethics and Professionalism Flashcards

A registered salesperson at a dealership discovers that a used vehicle's CarProof report shows a minor structural repair, but the service manager instructs them to describe the vehicle as 'accident-free' because the repair was cosmetic in nature. What is the salesperson's primary obligation under OMVIC's Code of Ethics?

Answer: Disclose the structural repair to the prospective buyer regardless of the manager's instruction

Under OMVIC's Code of Ethics and the Motor Vehicle Dealers Act (MVDA), registrants have an independent duty to disclose all known material facts — including structural repairs — to consumers. A structural repair is always a material fact regardless of its perceived severity. The salesperson cannot hide behind managerial instruction; personal registration means personal accountability. Failure to disclose exposes both the salesperson and the dealership to OMVIC disciplinary action.

A dealership salesperson is negotiating with a buyer who mentions they are under financial pressure and need a reliable vehicle to keep their job. The salesperson knows the vehicle has had recurring transmission issues that were temporarily patched. Under OMVIC's ethical framework, which course of action is most appropriate?

Answer: Disclose the recurring transmission history and allow the buyer to make an informed decision

Recommending a warranty without disclosure (option C) is a deceptive practice — it monetizes a known defect without informing the consumer. Referring to service without disclosure (option D) delays and sidesteps the registrant's duty. Under OMVIC's Code of Ethics, the consumer's vulnerability (financial pressure, job dependency) actually heightens the ethical obligation to disclose, not reduce it. Full disclosure of the recurring transmission history is mandatory so the buyer can make a truly informed decision.

Two registered salespeople at competing Ontario dealerships are friends and agree informally to each refer customers who cannot qualify for financing at their own store to the other's dealership, splitting any resulting commission. Which OMVIC concern does this arrangement most directly raise?

Answer: It constitutes an undisclosed fee-splitting arrangement that may breach the MVDA

Under the MVDA and OMVIC regulations, registrants must not receive or pay undisclosed commissions or referral fees in connection with a vehicle transaction. An informal cross-dealership referral commission split is an undisclosed financial arrangement that compromises impartiality and must be disclosed to all parties — including the consumer and both dealership principals. Even disclosure to principals alone does not fully satisfy the consumer-transparency obligation. This arrangement, as described, breaches ethical and regulatory requirements.

An OMVIC-registered dealer principal is aware that one of their salespeople has been verbally promising buyers a 'lifetime powertrain warranty' that does not exist, relying on buyers not reading the written contract carefully. The dealer principal has not reported this to OMVIC. Under the MVDA, what is the dealer principal's exposure?

Answer: Potential disciplinary action including registration conditions, suspension, or revocation for permitting deceptive practices

Under the MVDA, a dealer principal is responsible for the conduct of all registrants employed at their dealership. Knowingly permitting a salesperson to engage in deceptive practices — and failing to report it — constitutes a breach of the dealer principal's own registration obligations. OMVIC can impose conditions, suspend, or revoke the dealer's registration. The dealer principal's personal non-involvement in making the false statements does not shield them from disciplinary action when they had knowledge and failed to act.

A buyer signs a contract for a new vehicle but later claims the salesperson misrepresented the fuel economy figures by citing manufacturer test ratings without clarifying that real-world consumption is typically higher. The salesperson accurately quoted the official government test data. Under OMVIC's ethical standards, was the salesperson's conduct appropriate?

Answer: No — the salesperson should have proactively clarified that official test figures often differ from real-world consumption

While quoting official government test figures is not inherently false, OMVIC's Code of Ethics requires registrants to avoid misleading representations — including technically accurate statements that create a false impression. Quoting fuel economy test data without contextualizing that real-world consumption typically varies is a form of misleading by omission, especially when it influences the purchasing decision. Proactively noting the gap between test ratings and real-world figures is the ethically required practice. Option D is incorrect — fuel economy is a material fact.

A salesperson is about to complete a vehicle sale when they learn from a colleague that the buyer is a licensed private investigator hired by the buyer's estranged spouse to document assets. The dealership principal instructs the salesperson to refuse the sale solely on this basis. Under OMVIC's ethical and legal framework, which statement is most accurate?

Answer: The salesperson is obligated to complete the sale if the buyer meets all standard purchase requirements, as arbitrary refusal may constitute discriminatory dealing

Under Ontario's Human Rights Code and OMVIC's ethical obligations, dealers and registrants cannot arbitrarily refuse to sell to a buyer who meets all legitimate purchase criteria. Refusing a sale based on the buyer's occupation or identity (not a legitimate business reason like inability to pay or fraud risk) may constitute discriminatory dealing. The dealer principal's instruction does not insulate the salesperson from ethical accountability. A buyer who is legally entitled to purchase a vehicle and meets all standard criteria must be treated fairly. The PI's purpose — a private civil matter — does not create a lawful basis for refusal.