OMVIC OMVIC Code of Ethics Scenarios 1 — Questions and Answers
Question 1: A salesperson at a dealership discovers that a used vehicle they are about to sell has undisclosed previous frame damage. The manager says to ignore it and close the deal. What is the ethically required action under the OMVIC Code of Ethics?
- Disclose the frame damage to the buyer before the sale proceeds (Correct answer)
- Follow the manager's instruction since it is a business decision
- Reduce the price slightly to compensate the buyer without mentioning the damage
- Transfer the file to another salesperson to avoid personal liability
Correct answer: Disclose the frame damage to the buyer before the sale proceeds
The OMVIC Code of Ethics requires registrants to deal honestly and fairly; concealing known material defects violates the duty of honesty regardless of management pressure.
Question 2: A dealership salesperson is negotiating with a buyer and knows the vehicle was previously used as a daily rental. Under the OMVIC Code of Ethics, the salesperson must:
- Disclose the prior daily-rental use to the buyer before purchase (Correct answer)
- Mention the prior use only if the buyer specifically asks
- Lower the price instead of verbally disclosing the use
- Record the prior use in the internal file but not tell the buyer
Correct answer: Disclose the prior daily-rental use to the buyer before purchase
Prior use as a daily rental is a mandatory disclosure under MVDA regulations, and the Code of Ethics requires registrants to comply fully with all disclosure obligations.
Question 3: A registered motor vehicle dealer receives a written complaint from a consumer alleging misrepresentation. According to the OMVIC Code of Ethics, the dealer should:
- Respond to the complaint promptly and professionally, attempting fair resolution (Correct answer)
- Ignore the complaint unless a formal OMVIC investigation is opened
- Advise the consumer to retain a lawyer before any response is given
- Deny all allegations in writing without reviewing the file
Correct answer: Respond to the complaint promptly and professionally, attempting fair resolution
The Code of Ethics requires registrants to handle consumer complaints professionally and make reasonable efforts to resolve disputes fairly.
Question 4: A salesperson is also a part-owner of an auto auction business. A customer is considering buying a vehicle that the salesperson recently sourced from that auction. What does the OMVIC Code of Ethics require?
- Disclose the conflict of interest to the customer before completing the sale (Correct answer)
- Recuse themselves from the sale and reassign it to a colleague without disclosure
- Proceed with the sale normally since the vehicle's condition is unaffected
- Disclose the conflict only in the written contract, not verbally
Correct answer: Disclose the conflict of interest to the customer before completing the sale
The Code of Ethics requires registrants to disclose any personal financial interest or conflict of interest that could affect their dealings with a consumer.
Question 5: A customer becomes upset during negotiation and raises their voice. The salesperson, to end the confrontation quickly, tells the customer the vehicle has never been in an accident, which the salesperson has not confirmed. This conduct violates the OMVIC Code of Ethics because:
- Making unverified representations about vehicle history is misrepresentation (Correct answer)
- Salespeople are not permitted to speak to upset customers without a manager present
- Verbal statements about accidents are only binding if the vehicle is over $10,000
- The statement only becomes a violation once it is repeated in writing
Correct answer: Making unverified representations about vehicle history is misrepresentation
The Code of Ethics prohibits registrants from making false or misleading statements; stating unverified facts as truth constitutes misrepresentation.
Question 6: A dealership's finance manager presents a consumer with an extended warranty that has been automatically included in the contract without prior discussion. When the consumer questions it, the finance manager says it is mandatory. This behaviour violates the OMVIC Code of Ethics because:
- Including unauthorized products in a contract without consent is deceptive and unethical (Correct answer)
- Extended warranties may only be offered after a test drive has been completed
- Finance managers are not permitted to discuss warranties without a licensed salesperson present
- Warranties are only mandatory if the vehicle is under three years old
Correct answer: Including unauthorized products in a contract without consent is deceptive and unethical
The Code of Ethics requires honest dealing; adding undisclosed charges to a contract without consent is deceptive conduct prohibited under the Code.
Question 7: During a trade-in appraisal, a salesperson notices the customer's vehicle has significant rust damage that the customer has not mentioned. The salesperson plans to use this undisclosed information to lowball the trade-in without telling the customer what was found. Is this consistent with the OMVIC Code of Ethics?
- No, because registrants must deal honestly and not exploit information asymmetry to the consumer's detriment (Correct answer)
- Yes, because appraisal negotiations are competitive and dealers are not required to disclose inspection findings
- Yes, because the customer is responsible for knowing the condition of their own vehicle
- No, but only if the rust damage results in a trade-in reduction greater than $2,000
Correct answer: No, because registrants must deal honestly and not exploit information asymmetry to the consumer's detriment
The Code of Ethics requires fair dealing; withholding inspection findings to gain an unfair advantage in a trade-in negotiation is contrary to honest and ethical conduct.
OMVIC OMVIC Code of Ethics Scenarios 1
A salesperson at a dealership discovers that a used vehicle they are about to sell has undisclosed previous frame damage.
The manager says to ignore it and close the deal.
What is the ethically required action under the OMVIC Code of Ethics?