Reminder: Complying with Contractual Obligations for Vehicle-Related Products and Services

OMVIC has recently received complaints about some dealers refusing to provide full refunds when contracts entitle consumers to one.

In some cases, dealers incorrectly insist on pro-rated refunds or deny refunds altogether – particularly when consumers request to cancel a product or service within the time period specified in the agreement.

Under the Motor Vehicle Dealers Act (MVDA) all dealers and salespersons must comply with the terms of a contract entered into with consumers.

This includes vehicle-related products and services involving:

• Extended warranties.
• Service plans.
• Guaranteed auto protection (GAP) insurance.

Failing to meet contractual obligations may lead to administrative action.

Tips for Compliance:

• Understand the terms and conditions of all warranty, insurance, and service-related agreements you offer or facilitate.
• Consider the potential financial implications of cancellations before offering these products and services.
• Comply with the cancellation and refund provisions outlined in those agreements, whether they require a full refund or a pro-rated amount.

For any questions or further clarification, please contact the Industry Standards & Conduct Department at 1-800-943-6002.