OMVIC Code of Ethics Scenarios Flashcards

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:

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.

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:

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.

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:

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.

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:

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.

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:

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.

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:

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.

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:

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.