Complete disclosure means giving the full picture

OMVIC is seeing a concerning pattern in the marketplace. In some cases, dealers and salespersons are telling customers that a vehicle has an issue, but they are not explaining the full nature of that issue or including it on the bill of sale. Customers must be given clear, complete, and understandable information before they agree to buy a vehicle.

Telling a customer only that a vehicle “has been in an incident” may leave out important facts. A customer may assume the damage was minimal, that the vehicle had minor repairs, or that the manufacturer’s warranty still applies. But that may not be true.

Important facts cannot be left out

If a vehicle was declared an insurance write-off, has lost warranty coverage, sustained significant damage, those facts must be clearly disclosed.

Leaving out key details can give the customer the wrong impression, even when some disclosure has been made. A partial disclosure can be misleading. Also, including verbiage such as “see attached vehicle report” does not meet the obligation to disclose material facts.

Plain language matters

Dealers and salespersons should avoid acronyms, abbreviations, and industry terms that customers may not understand. Language that is clear in the industry may not be clear to the average customer.

Disclosures should be written in plain language so the customer can easily understand what happened to the vehicle and why it matters. Customers should not have to interpret dealer language or guess what a disclosure means.

A vehicle report does not replace disclosure

Writing “see attached vehicle report” does not meet the obligation to disclose material facts. A vehicle history report may support the disclosure but does not replace it.

If the report shows a write-off, major damage, loss of warranty, or other important facts, that information should be clearly summarized for the customer in writing. The customer should not have to search through a report and figure it out on their own.

Does the customer understand what is being disclosed?

Complete disclosure protects consumers and supports fair, transparent transactions. OMVIC expects dealers and salespersons to give customers the full picture, in writing, and in language they can easily understand.

Resources

Disclosures Guideline
There are certain types of information that dealers are required to disclose to their customers. These requirements are covered in the relevant legislation and regulations. Dealers who don’t make the required disclosures might face legal or regulatory penalties as a result. The disclosures guideline is intended to provide a full overview of all disclosure requirements as they relate to advertising, marketing, sales and leasing. To view, click here.

Dealer Webinars on Advertising Compliance and Disclosures Compliance
Weekly webinars are also conducted regularly for dealers and salespeople to attend from the comfort of their own office. To see upcoming webinars, click here.

Industry Standards & Conduct Team
The Industry Standards & Conduct Team help dealers understand and comply with the MVDA, its regulations, and the Code of Ethics. They are available to answer compliance questions and provide guidance when needed. Inquiries can be sent to [email protected].