OMVIC says laying charges helped speed up MVDA compliance

Despite years of build-up and several rounds of educational programs for Ontario dealers, the Ontario Motor Vehicle Industry Council says it saw “widespread non-compliance” after the Motor Vehicle Dealer Act, 2002, took effect in January.

Carey Smith, OMVIC’s director of investigations, covered the most contentious topic at May’s Remarketing Forum and Expo in Niagara-On-The-Lake, saying the council eventually adopted a “tough love” approach with non-compliant dealers.

“We tried to caution people and send letters, but it really didn’t work,” he told the assembly, adding that even compliant dealers began contacting OMVIC asking for stricter enforcement of the act’s advertising regulations.

Smith’s presentation focused primarily on common violations dealers make with regards to MVDA advertising regulations. He said the “all-in pricing” continues to be the biggest issue.

“If a dealer is advertising a car for $10,000, I should be able to walk into the dealership, hand him a cheque for $10,000 and drive away in the car,” he said. “It’s as simple as that… to get people to understand this and start doing it was next to impossible to do.”    

The act states an advertised price in paid advertisements, handouts, flyers and banners must be all-in and free from hidden fees and charges. The only item the price is allowed to exclude is GST and PST.

He admitted that monitoring all forms of vehicle advertising in the province was “very hard,” but after warning dealers for months, OMVIC eventually sifted through every advertisement on AutoTrader.ca and “as many Internet ads we could find,” for about a week.

The result?

“If there was a violation, even in a minor way, the dealer got a summons charging them under the Motor Vehicle Dealer’s Act. Tough love, but very effective and a quick action that got widespread compliance very quickly.”

Nearly 100 dealers have been charged with advertising offences so far, he said.

Other common mistakes in advertising include disclosure around daily rental use, terms of extended warranties and just how “prominent” this information is.

“What the government tried to do when they were writing the act was to get rid of the fine print entirely,” he said. “Things like daily rental use has to be at least as prominent as the price of the car and has to be up in the body of the ad not down in the bottom.”

But Smith and OMVIC’s lack of a detailed minimum standard for things like prominence drew questions from the crowd on the ambiguity of certain sections in the act.

If the council does not mandate a font size or location, who determines what is “prominent?” Who determines what is “excessive pricing?”

Smith said a judge would determine those types of things, but prosecution would not be sought unless it was “pretty obvious.”