August 2013
Consumer Line
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INDUSTRY NEWS

Windsor Dealer Fined $20,000 for Breaching Code of Ethics


Best Rate Auto Sales (1037166 Ontario Inc) and Donald Rezoski have been fined $20,000 after being found in breach of numerous sections of the OMVIC Code of Ethics. Rezesoki was also ordered to complete the OMVIC Certification Course. “This is one of the largest discipline fines handed out to date” stated OMVIC Manager of Communications Terry O’Keefe. “It is a clear message to dealers and consumers alike: OMVIC takes its mandate of providing consumer protection, and of creating a level playing field for dealers, very seriously”.

In an agreed statement of facts the Best rate Auto Sales admitted to:

  • Failing to disclose the as-is status of vehicles advertised for sale
  • Failing to provide an all-in price
  • Advertising an implied guaranteed trade-in value
  • Failing to provide written disclosure that a vehicle was previously registered in another jurisdiction
  • Failing to provide written disclosure of vehicles’ previous accident damage (over $3000)
  • Failing to ensure extended warranty payments and documents were sent to the warranty provider within the mandated seven days

Each of these is a violation of the Code of Ethics which is established to ensure dealers and salespeople conduct business with honesty, integrity and in accordance with the law.

Dealers or salespeople who breach the Code can face fines up to $25,000. They can also be ordered to complete educational courses and can be held responsible for the costs associated with a discipline hearing. While the complaint against Best Rate was settled without the need of a formal hearing, it is worth noting that should one be held, the case is heard by three panelists - two of whom come from the industry. “Basically, the accused is judged by a panel of their peers” explained O’Keefe. “The process is one in which dealers collectively ensure unacceptable conduct is punished”.

The vast majority of dealers are compliant and believe all dealers must abide by the rules; it’s by doing so that consumers receive transparency, the industry’s reputation grows and the marketplace is kept fair. “This is why the discipline process has become an incredibly valuable tool in OMVIC’s regulatory toolbox”.


HAVE YOU HEARD?

Inside OMVIC - Inspectors


One of the ways OMVIC ensures dealers comply with the MVDA is through the employment of Inspectors. Based regionally to provide an inspection program for the entire province, OMVIC Inspectors conduct regular visits to all Ontario registered dealers. Accessing dealership books and records, reviewing advertising and dealer practices, and providing information and feedback are all in a day’s work for an OMVIC inspector. Inspectors may also inquire about any complaint received regarding the dealer’s conduct; this helps OMVIC ensure that dealers and salespersons understand and comply with all requirements of the MVDA. OMVIC’s inspection program is a vital component in its efforts to protect consumers in Ontario.


CONSUMER PROTECTION

Clear Comprehensible and Prominent


The Motor Vehicle Dealers Act 2002 (MVDA) requires dealers to provide disclosures on contracts (e.g. for collision or incident damage greater than $3000) and in advertisements (e.g. previous daily rental) that are Clear, Comprehensible and Prominent (CCP); and yet the MVDA doesn’t specifically define CCP. OMVIC is often asked, by dealers and consumers alike, how we interpret Clear, Comprehensible and Prominent; so here’s OMVIC’s take on CCP:

  • Clear – the exact meaning of the statement or message is easily understood; it is not open to interpretation; it is not vague or ambiguous
  • Comprehensible – the statement or message is written in language/words and manner that is easily understood; there are no hidden meanings; there is no special knowledge or experience required to understand the message
  • Prominent – the statement or message is likely to attract the attention of the viewer/reader/listener; the statement or message is more noticeable (by size or type of font or placement on a page) than other information on the same document/page/announcement; it is not hidden or in small print, or written in font that is difficult to read due to size, style, colour, contrast, orientation (e.g. vertical) or placement on a page or document; it is not placed on a webpage that requires the reader to scroll down the page (or side-to-side) in order to view it

So, when trying to interpret CCP, don’t over-think it; it really is common sense. Disclosures in advertisements and on contracts should be easily understood and noticed. If a disclosure statement meets these requirements, it is likely clear, comprehensible and prominent.


EXTRA EXTRA

OMVIC golf tournament proceeds donated to local charity


OMVIC donation

Following the 14th Annual OMVIC Charity Golf Tournament, a donation of $6,461.09 was presented to the New Circles Community Services by OMVIC staff.


EXTRAS
- Auto Talk
Definitions

The following definitions are provided to better help consumers understand terms that are commonly used in the auto industry:

Third-party Extended Warranty: a contract whereby an entity, other than a motor vehicle manufacturer, agrees to provide coverage of the costs associated with the repair or replacement of components of a motor vehicle, including the labour necessary to repair or replace those components.

Deductible: the dollar amount, if any, related to each warranty claim that the consumer is responsible for paying. A deductible is often payable for each claim made under an extended warranty.

Activation Fees: additional costs to have the warranty provider activate its coverage. Consumers should ensure they understand all the costs and limitations associated with a warranty before purchasing it.

Claim Limit: the maximum amount the warranty company will pay towards a repair, regardless of the total cost of repairs. For example, some extended warranties have claim limits of only $500, however, an engine or transmission repair may cost $2,500 or more. In such a case, the consumer would be responsible for most of the repair costs. It’s important to understand what a warranty covers, and how much the warranty provider will pay in the event of a claim.

Be sure to check out the next Consumer Line for terms related to extended warranties!


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OMVIC is the self-management organization of the motor vehicle dealer industry and administers the Motor Vehicle Dealers Act -- a public protection statute -- on behalf of the Ministry of Consumer Services. OMVIC's mandate is to maintain a fair and informed marketplace by ensuring registration of motor vehicle dealers and salespeople, regularly inspecting all of Ontario's 8,800 dealerships, maintaining a complaint line for consumers and conducting investigations. OMVIC also administers the Motor Vehicle Dealers Compensation Fund.