Enforcement Process Overview

In general, people who sell or lease motor vehicles in Ontario must be registered by OMVIC. Most registered motor vehicle dealers and salespersons adhere to the high ethical standards required by the laws and regulations governing the industry. But when a dealer or salesperson fails to meet those expectations, they may be subject to one or more of our enforcement proceedings.

OMVIC has been delegated responsibility for administering and enforcing the Motor Vehicle Dealers Act (MVDA). This includes a Code of Ethics (CoE) which must be followed by registered dealers and salespersons.

Notice of proposal/licence appeal tribunal

OMVIC’s registrar is responsible for the overall administration of the MVDA. This responsibility includes the authority to issue proposals to refuse, revoke or suspend registration. If the registrar has reasonable grounds to believe that an applicant or registrant does not meet the criteria for registration as a dealer or salesperson under the MVDA, he or she will do one or a combination of the following: issue a notice of proposal to refuse an application for registration; suspend or revoke an existing registration; or apply conditions to a registration.

The notice of proposal will detail the grounds for the disentitlement. An applicant or dealer/salesperson has the right to appeal this decision to the Licence Appeal Tribunal (LAT) of Ontario. This is an independent body similar to a court and empowered to hear evidence and deliver a decision on whether the registration should be refused, revoked, or have conditions added.

Most of the time when a dealer or salesperson is facing the possibility of having their registration revoked, they will be able to trade motor vehicles until LAT makes its decision. But in serious cases, we may seek to immediately suspend a dealer or salesperson’s registration before a hearing has taken place.

Notice of complaint/discipline committee

The second type of enforcement proceeding relates to registered dealers and salespersons who have violated the Code of Ethics. In these cases, the registrar will issue a notice of complaint detailing the alleged violations of the code.

A registrant who disagrees with the notice of complaint has the right to have the matter heard before the Discipline Committee. This is a three-person panel (made up of registered dealers/salespersons and non-industry representatives of the public). The committee will hear evidence, decide whether the allegations are founded and if so, decide on an appropriate penalty. They can order a fine of up to $25,000 per violation, per party (dealer or salesperson), and mandatory education courses.

Provincial Offences Act proceedings

In some cases, a violation of the MVDA, Consumer Protection Act (CPA), or certain other laws will result in a salesperson or dealer being formally charged with an offence and prosecuted under the Provincial Offences Act (POA). People who sell motor vehicles without being registered (typically referred to as curbsiders), may also be subject to POA proceedings. If convicted, the statutory minimum penalty for such an offence is $5,000.

Offences are investigated by our investigators, who conduct interviews, gather evidence, and testify in court against the defendant. Upon conviction, penalties can include up to two years in jail for the most serious offences, and fines from $2,500 to a maximum of $250,000. A person convicted of an offence under a law enforced by OMVIC is often given a probation order in addition to a fine. In addition to any penalty, a person may be ordered to pay compensation or make restitution.

Freeze order

In very extreme circumstances, we may issue a freeze order without notice to the dealer which would freeze their assets or trust funds. This may occur if a search warrant has been issued or a criminal proceeding has started, to ensure consumer protection. A freeze order may also be issued against an alleged curbsider (a non-registered salesperson or dealer).

OMVIC’s approach to enforcement

We use a range of information sources to regulate industry conduct. Applications for registration or renewal of registration are detailed, and the information is verified through public and non-public methods.

We also work closely with other law enforcement agencies to identify persons engaged in illegal activities. Tips and complaints from consumers, dealers, salespersons industry stakeholders, and the public often lead to enforcement action.

In each of the types of enforcement proceedings, dealers and salespersons have the right to know the case against them. They can challenge our witnesses and evidence, and present their own evidence, witnesses, and legal arguments. In some circumstances, they may be able to negotiate a mutually acceptable outcome to the proceeding. They may choose to represent themselves or hire a lawyer or paralegal to defend them in court or before LAT or the Discipline Committee. Decisions are public and posted.

Depending on the type of offence and circumstances of the case, a dealer or salesperson may be subject to one or more of the three types of enforcement proceedings. For example, a dealer alleged to be selling motor vehicles with rolled-back odometers or without properly disclosed accident repair histories may face both a trial in Provincial Offences Court (with the possibility of jail time and/or a high fine) and have their registration revoked via a notice of proposal.

We may take an educational approach rather than immediately commencing enforcement action. Sometimes, a letter of caution can correct a dealer or salesperson’s conduct. However, this depends on the severity of the offence, past violations, the risk to the public, and our obligation to ensure a professional, fair, and honest motor vehicle sales industry in Ontario.