The December 2021 Audit was significant and critical of OMVIC: found here Value for Money Audit: Ontario Motor Vehicle Industry Council (omvic.on.ca)
Two articles which highlight some the findings include:
- Ontario’s Auditor General finds OMVIC underperforms in protecting car buyers. – WHEELS.ca; and
- Ontario Auditor Report Blasts Government Management, Enforcement | Consumers Council of Canada.
Effect on Salespeople and Small Dealerships?
Salespeople and dealers should expect greater enforcement of the regulations by OMVIC, particularly new dealers without an established track record.
The easy-to-spot areas that OMVIC will likely focus on (i.e. highlighted by the Audit), are:
Issues Affecting Salespeople:
- Continuing Education Courses – 76% of registered salespeople have taken OMVIC’s updated educational course, meaning that 24% have not taken this course.
- Expect requirements be put into place by OMVIC, requiring full compliance.
- Also, you might expect more ongoing requirements for education.
2. Increased Consumer Awareness of OMVIC and Other Protections – many consumers are unaware of OMVIC and of the protections available, such as the cooling off period and the all-in-price advertising requirement.
- Expect more stringent requirements, imposed on dealers (i.e. salespeople), to educate consumers as to OMVIC and also protections available to them, as part of the typical closing transaction checklist.
Issues Affecting New / Small Dealers:
- Starting a New Dealership / Funding Requirements – insufficient review of whether sufficient funding was in place for new dealership applications.
- Expect OMVIC to require compliance with the funding issue for all new applications, as well as for new dealerships in general;
2. Letters of Credit from Dealers May Become Commonplace – less than 1% of dealers have a letter of credit in place “despite some dealers posing serious risk of financial harm”.
- For new dealerships, expect a much stricter / comprehensive approach from OMVIC, as the lack of an established track record would make this category of dealers an easy focus group
3. Dealer Inspection – OMVIC inspected 60% of dealers within 3 years, Meaning that 40% of dealers were not.
- Expect more frequent inspections, which has a knockdown effect on inspection of salespeople
4. Greater Enforcement of Reporting All Vehicle Sales to OMVIC (and Payment of $10 per Transaction Fee). In 2019, $90,000 worth of transaction fees belonging to OMVIC were not reported by 670 dealers.
- This is a catchy and easy-to-understand issue
- Expect greater emphasis on the responsibility, of dealers and salespeople, to fully report all transactions
In general, OMVIC will increase its enforcement and response to consumer complaints.
The focus is on protecting the consumer.
Salespeople and small / new dealerships should expect greater enforcement of same.
Gregory Chang