Georgian College ACC Textbook 2024 Edition PDF

STUDENT MANUAL 2024 EDITION  Automotive Certification Course STUDENT MANUAL Laws, Regulations and Practices 2024 Edition Text Copyright © 2024 OMVIC Developed by the Automotive Busin...

STUDENT MANUAL 2024 EDITION  Automotive Certification Course STUDENT MANUAL Laws, Regulations and Practices 2024 Edition Text Copyright © 2024 OMVIC Developed by the Automotive Business School of Canada at Georgian College in collaboration with OMVIC. “OMVIC and design” is a registered trademark of the Ontario Motor Vehicle Industry Council. “Georgian College” and “Automotive Business School of Canada” are prohibited marks registered to the Board of Governors of Georgian College of Applied Arts and Technology. DISCLAIMER: This Student Manual is NOT legal advice. Do not rely solely on this course material. For details about Ontario laws and regulations, see ontario.ca/laws. Consult a lawyer to assist with any questions regarding the Motor Vehicle Dealers Act, 2002, the Consumer Protection Act, 2002 and all other laws. WELCOME TO THE AUTOMOTIVE CERTIFICATION COURSE Since 1999, the Ontario Motor Vehicle Industry Council (OMVIC) and FAST FACTS Georgian College’s Automotive Business School of Canada have offered the Automotive Certification Course. All new dealers and salespeople in Ontario All new automotive have to take this course. It was the first course for dealers and salespeople in dealers and Canada to be mandatory. salespeople in Ontario have to take This is the manual for the course. It’s divided into 18 chapters with review this course. questions at the end of each chapter. The questions will help you remember what you’ve read and apply what you’ve learned. You’ll find the answers in You have 12 weeks Appendix 1. to take the course and pass the test There are different types of review questions, such as multiple choice, true- with a grade of 75% false and fill in the blank, as well as activities and assignments. However, the or more. questions on the Automotive Certification Test are only multiple choice. You have to apply to OMVIC Study and complete the test to be registered After registering for the course, you have 12 weeks to learn the course as a dealer or material and pass the Automotive Certification Test. You need a minimum salesperson. grade of 75 percent to pass the test. Using the C.A.L.E. You can choose to take the Automotive Certification Test online or in person, designation but you can only take it once. The email you got when you registered for the builds trust with course tells you all about taking the test. consumers. If you don’t complete the test within 12 weeks or if you don’t get the minimum passing grade, your registration in the course will end. If you want to take the test after that, you can sign up for this course again and pay the full registration fees. Register separately with OMVIC Enrolling in this course doesn’t automatically register you with OMVIC. The email you get when you pass the Automotive Certification Test also tells you how to register with OMVIC as a dealer or salesperson. You can find more details about registration requirements on the OMVIC website at www.omvic.ca Become a registered dealer or salesperson Once you pass the Automotive Certification Course and are registered with OMVIC, you’ll be able to use the designation “C.A.L.E. – Certified in Automotive Law and Ethics.” You’ll get a certificate, letter of congratulations and an industry pin. Most dealers and salespeople work hard to serve and meet the needs of customers, but some consumers still don’t understand the benefits of buying from a registered dealer. Using the C.A.L.E designation builds trust, strengthens credibility and demonstrates to consumers that dealers and salespeople are proven professionals who have met Georgian College and OMVIC training standards. TABLE OF CONTENTS CHAPTER 1 CHAPTER 3 Introduction to the course 1 Dealer premises and records 25 1.01 Learning objectives 1 3.01 Learning objectives 25 1.02 The Motor Vehicle Dealers Act (MVDA) 2 3.02 Introduction 26 1.03 OMVIC’s role and responsibilities 2 3.03 Dealer premises 26 1.04 Collecting transaction fees 2 3.04 Dealer records 27 1.05 Overseeing dealer advertising 3 3.05 Protecting the privacy 1.06 Appointing a receiver and manager 4 of information 29 1.07 Protecting confidentiality 4 3.06 Trust account 30 1.08 Making information public 4 3.07 Freeze order 30 1.09 Summary 4 3.08 Summary 30 1.10 Definitions 5 3.09 Definitions 31 1.11 Test yourself 7 3.10 Test yourself 32 CHAPTER 2 CHAPTER 4 Registration of dealers Contract requirements 35 and salespeople 9 4.01 Learning objectives 35 2.01 Learning objectives 9 4.02 Introduction 36 2.02 Introduction 10 4.03 Contract for sale of a new vehicle 36 2.03 Dealer registration 10 4.04 Contract for sale of a used vehicle 38 2.04 Who must take the Automotive 4.05 Contract for lease of a vehicle 41 Certification Course? 10 4.06 Extra contract requirements 2.05 Salesperson registration 11 for trade-ins 43 2.06 Unregistered salespeople 12 4.07 Contract for sale on consignment 45 2.07 Certificate of Registration 12 4.08 Contract with Broker to arrange purchase or lease 46 2.08 Refusal of registration 12 4.09 Showing negative equity on contracts 46 2.09 “Interested and associated persons” 13 4.10 Financing representations 48 2.10 Appeal process 14 4.11 Summary and sample contract 48 2.11 Reapplying for registration 14 4.12 Definitions 52 2.12 Who doesn’t have to register with OMVIC? 14 4.13 Test yourself 55 2.13 Renewing registration online 14 2.14 Classes of dealers 16 2.15 Notifying OMVIC of changes 18 2.16 Summary 18 2.17 Definitions 19 2.18 Test yourself 22  TABLE OF CONTENTS CHAPTER 5 CHAPTER 8 Retail disclosure requirements Disclosure in advertising 77 (With customers – not with other dealers) 57 8.01 Learning objectives 77 8.02 Introduction 78 5.01 Learning objectives 57 8.03 What is an advertisement? 78 5.02 Introduction 58 8.04 Disclosure in dealer advertising 78 5.03 Clear, comprehensible 8.05 “All-in price” advertising 80 and prominent 58 8.06 Advertising as-is vehicles 80 5.04 Required disclosures 58 8.07 Advertising unfit vehicles 81 5.05 $3,000 damage discussion 60 8.08 Advertising cost of credit 81 5.06 Summary 60 8.09 Lease advertising 81 5.07 Test yourself 62 8.10 Using stock photos in advertisements 82 CHAPTER 6 8.11 Summary 82 Rescission – cancelling a 8.12 Definitions 82 contract if a dealer doesn’t 8.13 Test yourself 85 make disclosures 65 CHAPTER 9 6.01 Learning objectives 65 Extended warranties and 6.02 Introduction 66 service plans 87 6.03 Cancelling a contract 66 6.04 Important cancellation details 66 9.01 Learning objectives 87 6.05 Summary 67 9.02 Introduction 88 6.06 Test yourself 69 9.03 Sale of an extended warranty 88 9.04 Sale of a service plan 90 CHAPTER 7 9.05 Summary 91 Wholesale disclosure in 9.06 Test yourself 93 contracts with other dealers 71 CHAPTER 10 7.01 Learning objectives 71 Enforcing the MVDA 95 7.02 Introduction 72 7.03 Contract for sale or lease of a 10.01 Learning objectives 95 vehicle to another registered dealer 72 10.02 Introduction 96 7.04 Summary 73 10.03 Inspections 96 7.05 Test yourself 75 10.04 Inspection Guide & Checklist 96 10.05 Investigations 97 10.06 Summary 98 10.07 Test yourself 99 TABLE OF CONTENTS CHAPTER 11 CHAPTER 14 Avoiding curbsiders 101 Repairs 125 11.01 Learning objectives 101 14.01 Learning objectives 125 11.02 Introduction 102 14.02 Introduction 126 11.03 How to avoid selling to curbsiders 102 14.03 Repairs 126 11.04 Summary 102 14.04 Invoice for repairs 126 11.05 Definitions 102 14.05 Summary 128 11.06 Test yourself 105 14.06 Definitions 128 14.07 Test yourself 129 CHAPTER 12 Motor Vehicle Dealers CHAPTER 15 Compensation Fund 107 Researching a vehicle 131 12.01 Learning objectives 107 15.01 Learning objectives 131 12.02 Introduction 108 15.02 Introduction 132 12.03 Who pays into the Fund? 108 15.03 Total distance a vehicle 12.04 Valid claims against the Fund 108 has been driven 132 12.05 Spreading the word 109 15.04 Researching distance driven 132 12.06 Reimbursing the Fund 109 15.05 Liens 133 12.07 Summary 109 15.06 Summary 134 12.08 Test yourself 111 15.07 Test yourself 135 CHAPTER 13 CHAPTER 16 Consumer Protection Act (CPA) 113 Sale of Goods Act 137 13.01 Learning objectives 113 16.01 Learning objectives 137 13.02 Introduction 114 16.02 Introduction 138 13.03 Protection from unfair business 16.03 As-is sales 138 practices 114 16.04 Other conditions of sale 138 13.04 Disclosing all material facts 115 16.05 Return a deposit if no contract 13.05 Consequences of breaking the CPA 116 is signed 139 13.06 Two-thirds exception on 16.06 Customer doesn’t complete repossession 116 the sale 139 13.07 Financing agreements 116 16.07 Damages (costs of resale) 140 13.08 Leasing agreements 117 16.08 Summary 140 13.09 Residual obligation lease 118 16.09 Definitions 140 13.10 Summary 120 16.10 Test yourself 143 13.11 Definitions 120 13.12 Test yourself 123  TABLE OF CONTENTS CHAPTER 17 APPENDIX 1 Code of Ethics Regulations 145 Test yourself - Answers 167 17.01 Learning objectives 145 Chapter 1 167 17.02 Introduction 146 Chapter 2 168 17.03 Discussion of the Code of Ethics 146 Chapter 3 168 17.04 Code of Ethics requirements 146 Chapter 4 169 17.05 Disciplinary action 147 Chapter 5 169 17.06 Summary 148 Chapter 6 170 17.07 Definitions 148 Chapter 7 170 17.08 Test yourself 151 Chapter 8 170 Chapter 9 170 CHAPTER 18 Chapter 10 170 A variety of topics 153 Chapter 11 171 Chapter 12 171 18.01 Learning objectives 153 Chapter 13 171 18.02 Introduction 154 Chapter 14 172 18.03 Canadian Motor Vehicle Chapter 15 172 Arbitration Plan 154 Chapter 16 172 18.04 Consignment sales 155 Chapter 17 173 18.05 Consignment best practices 156 Chapter 18 173 18.06 Dealer plates and service plates 158 18.07 Wholesale auctions 158 18.08 Branding vehicles 159 APPENDIX 2 18.09 Safety Standards Certificate 160 Resource list 175 18.10 Used Vehicle Information Package 161 18.11 Summary 162 APPENDIX 3 18.12 Test yourself 164 Summary of Acts 179 APPENDIX 4 Glossary 183 NOTES CHAPTER 1 CHAPTER 1 Introduction to the course 1.01 Learning objectives 1.02 The Motor Vehicle Dealers Act (MVDA) 1.03 OMVIC’s role and responsibilities 1.04 Collecting transaction fees 1.05 Overseeing dealer advertising 1.06 Appointing a receiver and manager 1.07 Protecting confidentiality 1.08 Making information public 1.09 Summary 1.10 Definitions 1.11 Test yourself 1.01 Learning objectives This chapter will give you an overview of the law that auto dealers and salespeople in Ontario must follow (the Motor Vehicle Dealers Act), and the agency that enforces the law (Ontario Motor Vehicle Industry Council). You’ll get a brief introduction to the topics below, which will be covered in more detail in later chapters: OMVIC’s role Motor Vehicle Dealers Compensation Fund OMVIC Transaction Fee Program and which vehicles/ transactions it applies to OMVIC’s authority over dealer advertising OMVIC’s authority to appoint a receiver and manager OMVIC’s responsibility for confidentiality Specific information that OMVIC must make available to the public 1 Introduction to the course 1.02 The Motor Vehicle Motor Vehicle Dealers Compensation Fund Dealers Act (MVDA) A sum of money set aside to give to consumers to make up for losses under certain specific The Motor Vehicle Dealers Act (MVDA) is the law that circumstances. See Chapter 12 for more governs the retail automotive industry in Ontario. information. It sets out the rules that dealers and salespeople must follow. The Act is general, but it has two sets of detailed Regulations or rules: OMVIC board of directors OMVIC is governed by a nine-member board made General Regulations (Ontario Regulation 333/08) up of three members elected from the motor vehicle dealer industry, three from the general public and Code of Ethics and Operation of Committees three appointed by the Minister of Public and Business Regulations (Ontario Regulation 332/08) (often Service Delivery. shortened to Code of Ethics) 1.03 OMVIC’s role and 1.04 Collecting transaction fees responsibilities It is costly for OMVIC to carry out its role and responsibilities. The Transaction Fee Program helps The Ontario Ministry of Public and Business Service cover these costs. Delivery has made the Ontario Motor Vehicle Industry Council (OMVIC) responsible for enforcing How the Transaction Fee Program works the MVDA to make sure automotive sales are fair and customers have all the information they need. Dealers must give OMVIC a transaction fee for OMVIC does this by: each vehicle they sell or lease – including fleet and as-is transactions Registering dealers and salespeople Dealers pay the fees; salespeople do not pay fees Regularly inspecting dealers Dealers give the fees to OMVIC once a year when Receiving and investigating complaints from they renew their registration consumers – that is, people buying for personal, not business, purposes (see Chapter 13 for more Dealers can charge about consumers) the fee to the Transaction customer, if they fee per Disciplining and prosecuting dealers and choose to vehicle salespeople who don’t follow the regulations Visit www.omvic.ca Administering the Motor Vehicle Dealers for more information Compensation Fund about the current transaction fee OMVIC also works to improve professionalism in the industry and make sure there is fair, honest and open competition for all registered dealers. 2  CHAPTER 1 New car dealers and leases FAST FACTS New car dealers must pay the transaction fee for leases on behalf of the leasing companies (lessors) that car manufacturers work with (sometimes The Motor Vehicle called “captive lessors”). They pay the fee whether the car being leased is Dealers Act (MVDA) new or used. New car dealers can charge customers the transaction fee, is the law that if they choose. governs the retail automotive industry Independent lessors must pay the fee to OMVIC themselves. in Ontario. The Ontario Motor Transactions that are exempt from the fee Vehicle Industry Dealers do not have to pay the transaction fee when: Council (OMVIC) administers and Selling or leasing a vehicle directly to another registered dealer enforces the MVDA. Selling a vehicle to a lessee during or at the end of a lease term Dealers give OMVIC ◦ This is because the fee was already paid when the customer a transaction fee for leased the car each vehicle they sell or lease. They ◦ This also applies if the customer re-leases the same car as a way can charge this back of financing the lease buyout to the customer. Dealers can’t 1.05 Overseeing dealer advertising put misleading information in Dealers aren’t allowed to make a false, misleading or deceptive statement their ads. If they in any advertisement, circular, pamphlet or material published in any way. If do, OMVIC can they do, OMVIC may issue an “advertising order.” The order may require the discipline them. dealer to both: Stop the advertisement immediately Retract (take back) the information or publish a correction After getting an advertising order, a dealer: Must follow the order immediately, even if they appeal the order to the Licence Appeal Tribunal (LAT) May be told to submit all advertising to OMVIC to approve before publishing for up to two years Will be shown on the OMVIC website in a list of dealers who got a false advertising order License Appeal Tribunal (LAT) The LAT is an independent panel that considers appeals of the Registrar’s proposal to refuse, suspend or revoke (cancel) a dealer’s or salesperson’s OMVIC registration. See Chapter 2 for more information. 3 Introduction to the course 1.06 Appointing a receiver Registration information and manager ◦ The class or classes a dealer is registered in ◦ Dealers and salespeople whose registration In very serious situations, OMVIC may ask the court has been or may be refused, revoked or to appoint a “receiver and manager” to take control suspended of a dealership. They might do this if: ◦ Conditions that have been or may be placed The dealership is about to go out of business on a dealer’s or salesperson’s registration OMVIC is considering revoking (cancelling) the Disciplinary information dealer’s registration ◦ Dealers, salespeople and others associated OMVIC is about to make a “freeze order” with a dealership who have been charged with or found guilty of an offence as a result of Freeze order information from OMVIC In extreme situations, OMVIC may issue an order to ◦ Advertising orders and orders related to not freeze a dealer’s assets or trust funds. They only do following the Code of Ethics (see Chapter 17) this when customers and the public need protection, such as after a search order has been issued or Any other information about a dealer, salesperson a criminal case has started. OMVIC can make the or others associated with a dealership that OMVIC freeze order without telling the dealer first. thinks could help protect the public 1.07 Protecting confidentiality 1.09 Summary OMVIC and its employees must keep information The MVDA is the law that governs the retail they collect private and not share it with anyone, automotive industry in Ontario. It has two sets of except: regulations dealers and salespeople must follow: As required by the MVDA and Regulations the General Regulations and the Code of Ethics and Operation of Committees Regulations. To a government ministry or agency that protects consumers OMVIC has been delegated responsibility for administering and enforcing the Motor Vehicle To a law enforcement agency, such as the police Dealers Act (MVDA). 1.08 Making information public OMVIC must make the following information available to protect the public: Contact information ◦ Dealer’s name, business address and phone number ◦ Salesperson’s name and the dealer they are registered with 4  CHAPTER 1 FAST FACTS OMVIC has the power to have a “receiver and manager” take over a dealership, or to freeze a dealership’s assets, in certain situations. OMVIC must keep most information it collects private. However, it must make some specific information public. 1.10 Definitions appeal: a formal process where a higher court or Appeals Committee will have a second look at a decision made by a lower court, tribunal, Registrar or Discipline Committee. The appeals court or committee may keep (uphold) the original decision or reject (overturn) it. condition of OMVIC registration: something a dealer must do in order to keep their registration. For example, if a dealer’s registration is conditional on paying taxes they owe, that means they must pay the taxes or their registration will be cancelled. false or misleading advertising: promotional statements that are untrue or could give people the wrong idea. motor vehicle: a car, truck or other vehicle driven under mechanical, not muscular, power. Includes motorcycles but not snow vehicles, tractors or machinery mainly intended for farming or construction. motor vehicle dealer (under the MVDA): a person who buys and sells motor vehicles, whether on their own or on behalf of someone else, or who says they buy or sell motor vehicles. Registrar: the person at OMVIC who is in charge of registering dealers and salespeople and issuing notices of proposal to refuse, revoke or suspend a registration. regulations: as part of an act of law (such as the MVDA or Consumer Protection Act), the regulations are the rules that the act creates and that are part of the law. salesperson (under the MVDA): someone employed by a dealer to buy and sell vehicles on behalf of the dealer. 5 Introduction to the course NOTES 6  CHAPTER 1 CHAPTER 1 FAST FACTS 1.11 Test yourself Questions on the Automotive Certification Test are all multiple Check the answers in Appendix 1. If you get a question wrong, choice. This manual review that section in the chapter. has different types of review 1. What is the main law that regulates Ontario’s retail automotive industry? questions to help you understand the 2. Which agency enforces the MVDA? material. a. Ministry of Public and Business Service Delivery b. MVRO c. OMVIC d. Automotive Business School of Canada 3. List three things OMVIC does. 4. Briefly explain the Transaction Fee Program. 5. True or false: Dealers must give a transaction fee to OMVIC for each vehicle they sell or lease. 6. True or false: The transaction fee can be charged to the customer. 7. Which of the following information must OMVIC make available to the public? a. A dealer’s business name, address and phone number b. A salesperson’s name c. That a dealer’s or salesperson’s registration has been or may be refused, revoked or suspended d. All of the above 8. If OMVIC finds that a dealer’s advertising is false or misleading, what can they do to stop or fix it? 9. If a dealer gets a false advertising order, how long can OMVIC require them to get pre-approval for their ads? 10. List two possible situations that could cause OMVIC to apply to the court to appoint a “receiver and manager” to assume control of a dealership. 7  NOTES 8 CHAPTER 2 CHAPTER 2 Registration of dealers and salespeople 2.01 Learning objectives 2.02 Introduction 2.03 Dealer registration 2.04 Who must take the Automotive Certification Course? 2.05 Salesperson registration 2.06 Unregistered salespeople 2.07 Certificate of Registration 2.08 Refusal of registration 2.09 “Interested and associated persons” 2.10 Appeal process 2.11 Reapplying for registration 2.12 Who doesn’t have to register with OMVIC? 2.13 Renewing registration online 2.14 Classes of dealers 2.15 Notifying OMVIC of changes 2.16 Summary 2.17 Definitions 2.18 Test yourself 2.01 Learning objectives After completing this chapter, you will understand: OMVIC’s registration process for dealers and salespeople Why registration may be refused Who OMVIC considers an ‘interested person’ OMVIC’s reapplication process Responsibility to display certificates of registration and/or have them available Registration revocation or refusal and the role of the Licence Appeal Tribunal People or organizations that don’t have to register with OMVIC Classes of dealers (and definitions) Responsibility to tell OMVIC about changes to registration information 9 Registration of dealers and salespeople 2.02 Introduction Other conditions of dealer registration If the applicant is registered as a dealer in another All motor vehicle dealers and salespeople in Ontario province or country, they will be registered as an must register with OMVIC. Registration is valid for Outside Ontario Dealer. two years for salespeople and one year for dealers and then they must renew. If a dealer has more than one location, their registration will list all their authorized places of OMVIC does a number of background checks on business. applicants and screens them to be sure they meet the requirements of the MVDA. New applicants must To register, a dealer must name a “person in charge” also give OMVIC Canada-wide criminal record search of the dealership. If a dealer is renewing their results and complete the Automotive Certification registration and the previously listed person in Course. Applicants must give OMVIC complete and charge has left, they have to name a new person in true information on their application forms. It can charge in order to renew. delay the process if OMVIC has to ask for more details or clarifications. 2.04 Who must take the These steps help make sure everyone entering the Automotive Certification industry will follow the law and will act with honesty, integrity and in a financially responsible way – all of Course? which are requirements of the MVDA. The person in charge of the dealership must have If a new applicant doesn’t meet the requirements of completed the Automotive Certification Course. the MVDA, OMVIC isn’t allowed to register them. The OMVIC Registrar can refuse the application without Depending on how the business is registered, further explanation. If the Registrar wants to refuse different people must take the course. If the an application for any other reason, they must give dealership is registered as: the applicant a written explanation. Sole proprietorship – the sole proprietor must If a registered dealer or salesperson doesn’t follow complete the course the requirements of the MVDA, they may face Partnership – one partner must complete the course charges, disciplinary action or have their registration revoked (cancelled). Corporation – at least one officer or director must complete the course 2.03 Dealer registration All dealerships – any other person in charge of the business on a day-to-day basis must complete the course To apply for or renew an application as a dealer, the person must: In all these situations, if the person in charge has been in charge of the day-to-day operations of a Pay the required fee dealership for at least two years since January 1, 2007, they don’t have to complete the course (they Be 18 or older are exempt), although it is highly recommended. Not be in default of retail sales tax Note: Lease Finance Dealers and Fleet Lessors are Not owe money to the Motor Vehicle Dealers exempt from taking the course. Compensation Fund Have completed the Automotive Certification Course 10  CHAPTER 2 2.05 Salesperson registration FAST FACTS The minimum Before starting any discussion or negotiation with a possible buyer, seller or fine for an lessee of a vehicle, a salesperson must be registered with OMVIC – even if unregistered dealer the salesperson isn’t signing the deal. or salesperson (also called a curbsider) Salespeople register by completing an Individual Application form, available is $2,500. from dealers and from OMVIC. Both the salesperson and the dealer they work for are responsible for making sure the salesperson is registered. When they register, a dealer has to To apply for or renew an application as a salesperson, the person must: name a person in charge of the Pay the required fee dealership. Have completed the Automotive Certification Course Depending on how the dealership is Be employed as a salesperson by a registered dealer registered as a A salesperson who completed the course in the past but has been out of the business, different industry for two years may have to take the course again. people are required to take this course. Other conditions of salesperson registration A person has to A salesperson can work for more than one dealer, as long as each dealer be employed by a gives their written permission to OMVIC. dealer to register with OMVIC as a If a salesperson stops working for a dealer, both the salesperson and dealer salesperson. have to tell OMVIC and explain why the salesperson left. The salesperson’s registration expires when their employment ends. If the salesperson goes to work for a different dealer before the expiration date on their certificate of registration, they can submit a Salesperson Change Application to OMVIC. If OMVIC approves, then the salesperson’s registration expiry stays the same as shown on the certificate. Who else has to be registered as a salesperson? Anyone who signs a motor vehicle sale or lease agreement on behalf of a dealer must be registered. Business managers, finance managers, insurance managers and anyone who buys vehicles at auction must be registered. An officer or director of a corporate dealership, or a partner in a registered dealership, must be separately registered as a salesperson to sell or lease vehicles on behalf of the dealer. 11 Registration of dealers and salespeople 2.06 Unregistered salespeople Making sure no one acts as a salesperson until the dealer has confirmation of registration from OMVIC Dealers are responsible for making sure all their salespeople are registered with OMVIC. The A dealer should know a salesperson’s history most common reasons OMVIC finds unregistered before deciding to sponsor them for registration. salespeople at dealers are: To make sure they know all the information on the application, it’s a good idea for someone other than Salesperson has told the dealer they are the salesperson to submit a registration application registered when they aren’t to OMVIC. Application has been completed but not sent in to OMVIC (either by the dealer or the salesperson) 2.07 Certificate of registration Dealer hasn’t checked if the application was approved before letting the salesperson work Dealers A dealer should put a responsible person in charge Dealers must post their certificate of registration of making sure all salespeople are registered. This where the public can see it in each of their registered person should complete the Automotive Certification business locations. They must carry a copy when Course. The best choice would be someone in charge doing dealer activities and show it to anyone who asks. of the sales staff who is involved in making hiring decisions. Their responsibilities should include: This doesn’t apply to an Outside Ontario Dealer, a Lease Finance Dealer or Fleet Lessor. They must Checking with OMVIC that salespeople are keep their certificate in their place of business and registered. This can be done on OMVIC’s website show it to anyone who asks. Submitting a Salesperson Change Notice to OMVIC, if they hire a salesperson who is already Salespeople registered Dealers must keep a copy of each salesperson’s registration certificate at the business location Submitting a Salesperson Change Notice if a where the salesperson works and show it to anyone salesperson leaves the dealership, and telling who asks. OMVIC if the salesperson is leaving because of When doing dealer duties, a salesperson must carry issues that might mean they would not qualify for their certificate and show it to anyone who asks. registration Making sure an Individual Application is submitted to OMVIC for unregistered salespeople 2.08 Refusal of registration Signing all applications and notices related to OMVIC’s Registrar can refuse a registration salespeople on behalf of the dealer. OMVIC will application if they believe a dealer or salesperson: send information about applications and notices to the person who signed them Won’t do business in a financially responsible way Making sure salespeople get their registration Has done things in the past that show they certificates and following up with OMVIC if not. aren’t likely to follow the law or do business with A copy of the certificates must be kept in the integrity and honesty dealer’s records Has put false information on their application Keeping track of registration expiry dates and making sure renewal applications are submitted Hasn’t met the terms and conditions of on time registration 12  CHAPTER 2 OMVIC can refuse a corporation’s registration if the Registrar believes: FAST FACTS The corporation won’t do business in a financially responsible way, based on: Dealers have to ◦ Its financial position, or make sure all their ◦ The financial position of its officers/directors salespeople are registered. The corporation’s officers/directors have done things in the past that show they aren’t likely to follow the law or do business with integrity and Certificates of honesty registration for both dealers and An officer/director of the corporation has put false information on an salespeople have application to be available for customers to see. The corporation hasn’t met the terms and conditions of registration OMVIC can also suspend 2.09 “Interested and associated persons” a registration if the dealer or salesperson has OMVIC can also refuse, revoke or suspend the registration of a dealer, done something salesperson or corporation if the financial responsibility or past actions of an that’s prohibited “interested person in respect of the applicant/registrant” gives reasonable by the MVDA and grounds for it. puts the public at risk. OMVIC can Interested persons revoke (cancel) a OMVIC considers someone an “interested person” if, in OMVIC’s opinion, registration after the person: investigating the reason for the Benefits from or may benefit from the business suspension, or for Has or may have control (directly or indirectly) over the dealer or another serious salesperson reason. Has given or may have given financing (directly or indirectly) to the OMVIC can refuse business a registration if the Registrar An “interested person” would include an “associated person,” as described believes someone below. associated with the dealer, salesperson Associated persons or corporation One person is associated with another person in any of the following is not financially situations: responsible. One party is a corporation of which the other person is an officer/director. Officer/director includes anyone who carries out the duties normally done by an officer/director One person is in a partnership of which the other person is a partner Both people are partners of the same partnership One party is a corporation that the other party controls directly or indirectly 13 Registration of dealers and salespeople Both parties are corporations, and one Temporary suspension corporation is controlled directly or indirectly If the Registrar thinks it’s in the public interest, they by the same person who controls the other can order a temporary suspension that takes effect corporation directly or indirectly right away, instead of issuing a proposal. The person Both people are members of the same voting whose registration is suspended can appeal to the trust relating to shares of a corporation LAT. The suspension expires 15 days after the LAT gets a written request for a hearing (a chance to be Both people are associated with the same person heard), but if the LAT starts the hearing before the in one of the ways described above. Officer/ suspension expires, they can choose to extend it. director includes anyone who carries out the duties normally done by an officer/director 2.11 Reapplying for registration 2.10 Appeal process A dealer or salesperson whose registration was revoked or suspended can reapply for registration if In order to refuse, revoke or refuse to renew a they meet both these conditions: registration, OMVIC must first issue a “proposal.” The proposal is a written notice that says OMVIC intends It’s been two years since the registration was to refuse or revoke a registration and explains why. refused or revoked New information shows the circumstances have When a dealer, salesperson or other person receives changed a proposal to revoke or refuse their registration, they can appeal it to the Licence Appeal Tribunal within 15 days. 2.12 Who doesn’t have to Licence Appeal Tribunal register with OMVIC? The Licence Appeal Tribunal (LAT) is completely independent from OMVIC. Its purpose is to review Some people or businesses are exempt from proposals from OMVIC. registration (don’t have to register with OMVIC), such as wholesale auctions, wreckers and car rental Someone who receives a proposal has 15 days to agencies. See section 2.17 Definitions for a list of appeal it – that is, ask the LAT to have a second look exemptions. at it. If the person doesn’t appeal, the proposal is carried out and the registration is refused or revoked. 2.13 Renewing registration If the person does appeal, the LAT will hold a hearing to listen to evidence (proof of facts) and testimony online (statements from the people involved) about the proposal and then will give their decision in writing. Dealers and salespeople can renew registration Their decision may tell the OMVIC Registrar to go and pay all fees, including transaction fees, online ahead with revoking or refusing the registration, or by mail. to make changes to the proposal or to set it aside entirely. Dealers and salespeople can register for an online account by clicking Registrant Login on the OMVIC Sometimes, the LAT may put conditions on website, and entering their registration number, a registration. For example, they may say a name, date of birth and the email address OMVIC salesperson can’t be an officer of the dealer’s has on file. business, or that a dealer has to do what a government ministry has asked them. 14  CHAPTER 2 Online accounts for dealerships FAST FACTS Dealerships must name a dealer administrator (DA) to manage their online account. This can be the dealer or another staff member (e.g. controller, Someone who office manager, payroll manager) and the DA doesn’t have to be registered receives a proposal with OMVIC. to revoke or refuse their registration Naming a dealer administrator can appeal to the Licence Appeal The person who is naming a DA must be on file with OMVIC as having one Tribunal. of the following roles at the dealership: There are a number Person in charge of people and businesses that Officer are exempt from Director registering with OMVIC. Owner Dealers and Partner salespeople can manage their General manager registrations After activating an online account, the person naming the DA can log in, go to and notifications the Dealer Management tab and enter the following information about the DA: through the OMVIC website. First and last name as it appears on their driver’s licence Officers, directors, Date of birth owners and partners of the Personal email address dealership have If the DA is someone other than the person who created the online account, access to file all they’ll get an email asking them to confirm and activate their own account. applications and notices online. What can a dealer administrator do? A DA can use the online account to: File the dealership’s registration renewal Pay renewal fees and transaction fees Review registration renewal requests submitted online by salespeople Review transaction and renewal request history Subscribe to notifications for both the dealer and salespeople (e.g. application is approved, registration has expired) Even if a salesperson doesn’t register for OMVIC’s online services, the DA can still get notifications about the salesperson’s registration. 15 Registration of dealers and salespeople The DA can’t: of Ontario (MVRO), they must show a copy of the sales and service agreement in order to be assigned Submit a renewal application on behalf of a to this class. salesperson General Dealer (Used subclass): Buys, sells or Act as a dealer or salesperson, unless they are trades in only used vehicles. Generally applies to any registered dealer who isn’t a new car dealer and doesn’t fit any See or submit any of the following applications: other category. ◦ Business Deactivation Notice Broker: Arranges to buy, sell or trade in a vehicle ◦ Business Change Notices (amalgamation, on behalf of someone who isn’t a dealer. The broker legal/business name change, address change doesn’t own or take possession of the vehicle, and and add/remove individuals) doesn’t handle the money to pay for it. ◦ Other applications that can only be submitted by an officer, director, owner or partner of Outside Ontario Dealer: Registered outside Ontario the dealership (e.g. class change application, and buys vehicles from exempt wholesale auctions branch application, etc.) to export them to the place where the dealer is registered. 2.14 Classes of dealers Wholesaler: Buys, sells or trades in vehicles only with other registered dealers, which can include dealers registered outside Ontario. Dealers can register in the following classes and subclasses: Exporter: Only buys vehicles to export them outside General Dealer in the following subclasses Ontario. ◦ New and Used motor vehicles Lease Finance Dealer: Can’t be associated with ◦ Used motor vehicles a General Dealer, unless the reason that they’re associated is that the Lease Finance Dealer and Broker General Dealer are both associated with the same other person who is exempt from the MVDA. Wholesaler Exporter A Lease Finance Dealer can only: Outside Ontario Dealer Buy motor vehicles Lease Finance Dealer Lease a vehicle to a lessee if: ◦ The lease is made through a General Dealer, Fleet Lessor and ◦ Commercial Lessor subclass ◦ The lease is for 120 consecutive days or more ◦ Short-term Lessor subclass Sell a previously leased vehicle: A General Dealer, Broker and Outside Ontario Dealer ◦ Directly to the lessee or their partner (if the can only register in one class. All other dealers can lessee is a partnership) register in more than one class. ◦ Through a General Dealer to the lessee and Descriptions of classes person who drove the vehicle during the lease term or the lessee’s partner (if the lessee is a General Dealer (New and Used subclass): Buys, partnership) sells or trades in both new and used vehicles. If the dealer isn’t a member of the Motor Vehicle Retailers ◦ To a registered dealer 16  CHAPTER 2 ◦ At an auction where: FAST FACTS ▪ The person who holds the auction is exempt from the MVDA, and There are many ▪ The buyer is located and registered as a dealer in another different categories jurisdiction (province or country) or classes of Sell a vehicle they repossessed to or through a registered dealer or at an registered dealers. auction where: Some dealers can register in more ◦ The person who holds the auction is exempt from the MVDA, and than one class. ◦ The sale is made to someone located and registered as a dealer in another jurisdiction Trade in a vehicle with a General Dealer or person who is exempt from the MVDA Trade in a vehicle with the buyer if: ◦ The vehicle is part of a conditional sales contract originally made between the buyer and General Dealer and ◦ The General Dealer has assigned their interest under the contract to the Lease Finance Dealer Advertise any of the activities above Fleet Lessor (Commercial Lessor subclass) Doesn’t act as a dealer, except to: Buy or lease vehicles as a lessee Lease a vehicle to a lessee who is not a consumer Sell a previously leased vehicle to: ◦ The lessee ◦ The person who drove the vehicle during the lease term ◦ An officer or director of the lessee (if the lessee is a corporation) ◦ The partner of the lessee (if the lessee is a partnership) ◦ A registered dealer ◦ At an auction where: ▪ The person who holds the auction is exempt from the MVDA, and ▪ The buyer is located and registered as a dealer in another jurisdiction Advertise any of the activities above Fleet Lessor (Short-term Lessor subclass) Can only: Buy vehicles or lease vehicles as a lessee Lease a vehicle to a lessee who is not a consumer 17 Registration of dealers and salespeople Lease a vehicle to a consumer for a fixed term of Dealers and salespeople must notify OMVIC in less than four months, except if the lease renews writing within five days of: automatically Any changes to information they gave OMVIC for Sell a vehicle the Fleet Lessor leased to a lessee registration purposes who is not a consumer, and: Change to a dealer’s agreement that a ◦ To a registered dealer, or salesperson can work for more than one dealer ◦ At an auction where: ▪ The person who holds the auction is exempt from the MVDA, and 2.16 Summary ▪ The sale is made to someone located and registered as a dealer (or equivalent) in another jurisdiction All motor vehicle dealers and salespeople in Ontario must register with OMVIC. Registration Advertise any of the activities above is valid for two years for salespeople and one year for dealers, then they have to renew. 2.15 Notifying OMVIC of changes OMVIC does background checks to make sure people entering the industry will do business with honesty, integrity and in a financially Registered dealers and salespeople must notify responsible way. Applicants must complete the OMVIC of any change that affects their registration. Automotive Certification Course to register. They should do so right away and not wait until it’s OMVIC decides who is qualified to register, or time to renew. whether dealers and salespeople continue to be qualified. Dealers must notify OMVIC in writing within five days of: Dealers must list all their business locations Change of dealer address on their registration. Salespeople must be registered to a dealer. A salesperson can work Changes of officers or directors (for corporations for more than one dealer if all the dealers or partnerships) involved sign a written agreement. Hiring a salesperson, including their start date OMVIC must give written notice (called a A salesperson leaving the dealership, including proposal) if the Registrar intends to refuse or the date and reason revoke (cancel) someone’s registration. The person can appeal the decision to the Licence Any event that destroys records the dealer is Appeal Tribunal (LAT). The LAT can tell the required to keep, or makes them unavailable Registrar to go ahead with the proposal, change (e.g. theft, fire, flood; see Chapter 3 for more it or set it aside. information) A dealer or salesperson whose registration Salespeople must notify OMVIC in writing within five or renewal was refused and/or revoked can days of: reapply after two years if there is proof that the circumstances have changed. Change of address Starting to work for a dealer, including the start date The minimum fine for an unregistered dealer (also called a curbsider) is $2,500. Leaving a dealership, including the date 18  CHAPTER 2 Registered dealers and salespeople must notify OMVIC within 5 days if any of their registration information changes. 2.17 Definitions consumer: a customer acting for personal, family or household purposes, not business purposes. A consumer doesn’t include a corporation. corporation: a legal entity created by or under the authority of the laws of a province or of Canada. The corporation is separate from its shareholders. curbsider: an illegal, unlicensed seller who poses as a private seller to sell vehicles. Often the vehicles they sell are misrepresented, accident- damaged, odometer-tampered, stolen or have liens. employ (under the MVDA): to appoint, authorize or otherwise arrange to have another person act on one’s behalf, including as an independent contractor. independent contractor: someone working for themselves who contracts to provide specific services to someone else. lease: a secured arrangement where possession of the goods goes to the lessee, while title to the goods remains with the lessor. officer (under the MVDA): includes the chair and vice-chair of the board of directors, president and vice-president, secretary and assistant secretary, treasurer and assistant treasurer, general manager and assistant general manager of the corporation; partner or general manager and assistant general manager of a partnership; any other person designated as an officer by bylaw or resolution or any other person who performs functions normally performed by a person occupying one of the listed offices. sole proprietorship: a person carrying on business alone. trade (under the MVDA): includes buying, selling, leasing, advertising or exchanging an interest in a vehicle or negotiating or inducing or trying to induce the buying, selling, leasing or exchanging of an interest in a vehicle. 19 Registration of dealers and salespeople The following are exempt from person selling a power-assisted bicycle registering with OMVIC: person selling for family or sole proprietorship purposes bus or commercial vehicle dealer registered charity car rental agency: rents vehicles they do not own or sell, and rents for no more than 120 wholesale auction: an auction that has no consecutive days. property interest in the vehicles being sold, where only registered dealers or people exempt from company buying vehicles for business or registration can sell vehicles and only registered employee use, as long as the company isn’t also dealers can buy them. in the business of buying, selling or repairing vehicles. wrecker: vehicles bought to be wrecked or taken apart, and reported to the Ministry of creditors and their agents: those who legally Transportation as “wreck.” take possession of a vehicle from a debtor (someone who owes money) and sell it to or through a registered dealer. heavy truck dealer: a dealer who buys, sells or trades in vehicles that carry more than 21 tons (19,050 kg) fully loaded (gross vehicle weight), including a trailer if it has one. insurance company: buying or selling vehicles related to an insurance claim, registering the vehicles in the insurance company’s name and selling them to or through a registered dealer. lawyer liquidator, receiver, trustee in bankruptcy or executor (trustee) of an estate not-for-profit corporation giving consumers information to help with buying or selling, as long as the corporation has no property interest in the vehicle; no conflict of interest with a registered person or insurer; discloses what they get for providing the help; doesn’t handle any payments and reports to the Registrar each year. manufacturer or authorized distributor, as long as they notify the Registrar and only buy or sell vehicles with dealers in the General Dealer – New and Used vehicles subclass. 20  CHAPTER 2 NOTES 21 Registration of dealers and salespeople CHAPTER 2 2.18 Test yourself Check the answers in Appendix 1. If you get a question wrong, review that section in the chapter. 1. What is the minimum age required to be a dealer? 2. List three requirements to be a salesperson. 3. True or false: All dealers and salespeople go through a Canada-wide criminal record search as part of the registration application process. 4. Which of the following must be registered with OMVIC (choose all that apply): a. Dealers b. Salespeople c. Business managers d. Finance managers e. Service managers 5. List two reasons why OMVIC might refuse a dealer or salesperson’s registration. 6. If someone’s registration has been refused, what is one condition that has to be met before they can reapply? 7. If OMVIC issues a proposal to refuse or revoke someone’s registration, who can the person appeal to? 8. List four classes of dealers. 9. List three examples of people or businesses that are exempt from registration. 10. Name one change in information that a dealer must notify OMVIC about. 11. In a large dealership, who should the dealer make responsible for ensuring all salespeople are registered? Choose the most correct answer: a. Bookkeeper b. Salesperson c. Sales manager d. Payroll supervisor 22  CHAPTER 2 12. OMVIC can refuse, revoke or suspend registration of a dealer, salesperson or corporation if the financial responsibility or past actions of an “interested person” gives them reason to. Who does OMVIC consider an “interested person?” 13. Where must the dealer keep their certificate of registration? 14. True or false: A salesperson must show their registration certificate to a customer if the customer asks to see it. 15. Describe: a. Both classes of General Dealer b. Three other dealer classes 23  NOTES 24 CHAPTER 3 CHAPTER 3 Dealer premises and records 3.01 Learning objectives 3.02 Introduction 3.03 Dealer premises 3.04 Dealer records 3.05 Protecting the privacy of information 3.06 Trust account 3.07 Freeze order 3.08 Summary 3.09 Definitions 3.10 Test yourself 3.01 Learning objectives After completing this chapter, you’ll be able to describe: General regulations about a dealer’s premises (place of business) Registration requirements for a dealer’s premises Specific records dealers must keep Trust account requirements Why OMVIC can issue a freeze order 25 Dealer premises and records 3.02 Introduction Dealers are required to have the proper permits and insurance for their premises: The MVDA includes specific requirements for a Valid municipal permit for the display and sale of dealer’s place of business. It says dealers can vehicles only do business from the location listed on their registration (unless the dealer is classified as a Lease with a term of at least six months that Broker, Lease Finance Dealer, Fleet Lessor or Outside allows the display and sale of vehicles and gives Ontario Dealer). the dealer unrestricted access to the premises Valid garage and auto policy OAP4 with a The MVDA also describes what records (documents minimum third-party coverage of $1,000,000, and information) a dealer must keep, how long they as required by the Compulsory Automobile must keep them and even where a dealer must store Insurance Act records. The three general types of records covered by the MVDA are: Multiple dealer premises 1. Vehicle records A General Dealer can share a location with one or more other dealers, as long as customers can easily 2. Transaction records (related to buying and selling) see which dealer they are dealing with, and which 3. Business records one owns each vehicle. A shared location must allow OMVIC to inspect each dealer, and must have enough space for the dealers to store documents 3.03 Dealer premises properly. For these reasons, shared General Dealers’ premises must have: The location where a dealer does business is their A separate, permanent office space for each “premises.” On their OMVIC registration application, dealer that: a dealer has to list their: ◦ Is fully secured and enclosed (walls that go up to the ceiling, lockable door) Legal name (the name the business is registered under, such as 12345 Ontario Ltd.) ◦ Has enough space to securely store six years of books and records Trade name, if it’s different (the name used day- ◦ Gives the dealer a work area to do business to-day and in marketing, such as XYZ Car Sales) (including furniture such as desk, chairs, filing Business address cabinets) ◦ Has electricity, heat and access to a washroom Dealers can only do business under the registered name at the registered address, and no other An area for dealers to display vehicles that is location. clearly marked with each dealership’s name, or a sign on each vehicle that shows the name of the If the dealer is registered as a General Dealer or dealer selling it Exporter, their premises have to be separate from a dwelling (house or other residence). And shared premises must be: Clearly separate from other businesses operating Retailers who are selling vehicles need an office and at the location – except for an office the a lot – land or space to show the vehicles for sale. A dealership shares with a related business that the home, driveway or curbside can’t be a lot. The office same dealership operates, such as a repair shop and lot must be approved by the municipality to show and sell motor vehicles. All dealers must follow Easily accessible and open to the public, or be municipal bylaws and zoning requirements. reached by a clearly posted phone number, during normal business hours or at times that are clearly posted 26  CHAPTER 3 3.04 Dealer records FAST FACTS A dealer’s Dealers must follow strict rules for keeping and storing the following kinds of registration is documents and information: only valid for the name and location Vehicle records listed on their For every vehicle the dealer has for sale, they must keep records of: application. Dealers must tell OMVIC Vehicle identification number (VIN) within five days if their dealership Copy of any Safety Standards Certificate name, location or Result of any inspection under the Highway Traffic Act ownership changes. Details of any repair or reconditioning work done or authorized by the Dealers have to dealer, including the source of any parts, the cost of the work and the follow strict rules name of the repairer about the kinds of records they must If the odometer has been replaced or repaired: keep, and how they ◦ The reading both before and after the work store them. ◦ Name of the person who did the work Proof of applying for a new vehicle permit within six days, as required under the Highway Traffic Act Complete records of used vehicles, as required under the Highway Traffic Act An Outside Ontario Dealer doesn’t need to keep records of: Safety Standards Certificate Result of any inspection under the Highway Traffic Act Details of any repair or reconditioning work done or authorized by the dealer Garage registers The Highway Traffic Act requires that dealers keep a complete record of information about each vehicle so the vehicle can be easily identified. The information must be recorded in a garage register. A dealer must also notify the Ministry of Transportation of any vehicle or trailer they buy or sell. Dealers can keep a garage register on paper or electronically as long as they record the required information under the required headings. Either paper or digital garage registers must be available for OMVIC, the police or the Ministry of Transportation to see at any time during normal business hours. If they use digital garage registers, dealers should be sure to make backups. 27 Dealer premises and records Transaction records List of all “associated persons” and how they are associated with the dealer (see Chapter 2.09) For each purchase, sale or trade, the dealer must keep records of each: Banking records, including bank accounts and financing, such as loan agreements and/or credit Sale to a buyer arrangements Lease to a lessee Documents related to dealer premises Consignment contract Dealers have to give OMVIC the following documents Sale to a customer under a consignment contract, related to their premises: whether the dealer is the consignor or consignee Valid municipal permit for the display and sale of If the dealer is a broker, each agreement with a vehicles customer that they arrange Copy of the lease, if the premises are leased If a broker arranged the trade Evidence of valid garage and auto insurance Sale or lease arranged by the dealer, if they are a general dealer Storing records Dealers must store the required records for six years Purchase (including trade-ins) by the dealer at one of their registered addresses (not a home Sale of an extended warranty or service plan, or residence). If there isn’t enough space at their including whether the dealer arranged the sale registered address, the dealer can apply to OMVIC for permission to store records at another location. Method and amount of payments made to or by OMVIC staff must be able to access the other the dealer (including commissions). Records must location for inspection purposes during normal include: business hours. ◦ Copies of cheques, receipts or any other evidence of payments If any required records are destroyed or become unavailable due to a serious event such as theft, fire ◦ Any correspondence, worksheet or other or flood (called a “force majeure”), the dealer must document that shows the breakdown of costs tell OMVIC in writing within five days what was lost related to any sale or lease and why. A fleet lessor doesn’t need to record: Electronic record-keeping If a broker arranged the trade The following information about electronic record- Method and amount of payments made to or by keeping is just a guideline and not a requirement of the the dealer MVDA. Business records Dealers can store records in electronic format if they follow the same rules and guidelines as for paper The dealer must keep the following business records: records. Electronic record-keeping is optional, not Employee records: mandatory. ◦ Names of employees Dealers who digitize records that are currently in ◦ Positions held paper format can then dispose of the paper copies in ◦ Dates of employment a safe and secure way. ◦ How much each employee is paid ◦ Proof of payment 28  CHAPTER 3 If a dealer chooses to keep electronic records, they should be: FAST FACTS Kept safe, secure and only accessible to those authorized to access them Dealers have to keep Kept confidential customers’ personal information private. Available for and subject to regular audits to ensure integrity Information is personal when it can Organized, clear and understandable identify someone. Saved in a format, quality and resolution that is easily printed Backed up to a secondary source Dealers must get permission from the Registrar to keep electronic records off-site, such as in a cloud-based service or on a third-party computer server. 3.05 Protecting the privacy of information Dealers are required to keep personal information about customers and potential customers private. What is personal information? Information is considered personal if it can identify someone. This can be any two of the following types of information: name, date of birth, address, phone number, email address, etc. Or it can be just one piece of information that can identify someone on its own, such as driver’s licence, health card or credit card numbers. Dealers can only store personal information if they have the person’s express permission (clear and specific agreement) and can only use it for the purposes the person agreed to in writing. Who does personal information belong to? Customer information belongs to the dealership, not to an employee of the dealership. This means the dealer is responsible for keeping and protecting personal information as required by privacy laws. This includes the salesperson’s copy of a contract. Salespeople are not allowed to take personal customer information with them if they leave a dealership. If they do, it could be said the dealership didn’t fulfill its responsibilities. What should dealers do? Dealers can consider putting a clause in employment contracts that says information about customers and potential customers belongs to the dealership and that taking this information would be theft. New employees should be asked to initial the clause to show they are aware of it. 29 Dealer premises and records Dealers should also consider keeping customers’ In the case of a consignment deal, the dealer must personal information under lock and key, preferably deposit all the money they get directly into the in a central location, such as an office, that can also trust account. The dealer has to pay the consignor be locked. Personal information that salespeople the amount shown on the written consignment use should be marked “do not copy” and should be agreement before the dealer can take out any fee for collected at the end of each employee’s shift. Personal the sale. information stored in electronic format must also have protections in place to keep data secure. The dealer must reconcile the trust account each month within 30 days of getting the monthly If a salesperson thinks their situation is an exception statement from the bank or financial institution to these rules, they should talk about it with their (unless the account has a zero balance or there employer and talk to a lawyer before using anyone’s hasn’t been any activity on the account that month). personal information. Reconciling means checking the statement against the dealer’s transaction records and accounting for any differences. Dealers can get detailed instructions 3.06 Trust account for reconciliation from OMVIC. General Dealers must have a trust account to safely hold money for deposits and consignment sales, and 3.07 Freeze order keep it separate from their general funds. In extreme situations, OMVIC may issue an order to A General Dealer must have a trust account to hold: freeze a dealer’s assets or trust funds. They only do - Any deposit of more than $10,000 they get this when customers and the public need protection, from a buyer such as after a search order has been issued or a criminal case has started. OMVIC can make the - Money they get for a consignment sale when freeze order against a dealer or curbsider (illegal, the consignor bought the vehicle for personal unlicensed seller) without telling the person first. or family use The purpose of the trust account is to protect the customer’s money. 3.08 Summary The information below about trust accounts is just a guideline. Dealers should review the relevant sections The MVDA has specific requirements about a of the MVDA and check with a lawyer if they have any dealer’s place of business, about the kind of questions. records and information they have to keep and how they store it. The trust account should be set up at a bank, loan or trust corporation, credit union or authorized foreign General Dealers must have a trust account to bank under the Bank Act. The dealer must give hold any deposit of more than $10,000 that OMVIC the details of the trust account. they get, as well as the money they get from consignment sales. Trust account money must The name on the account should include the words be kept separate from the dealer’s general funds “Motor Vehicle Dealers Act, 2002, Trust Account” (or and can never be used as collateral. “Trust Account,” if there isn’t enough room) and the registered name of the dealer. In extreme situations, OMVIC can freeze a dealer’s assets or trust funds without notifying Money in the trust account must be kept separate the dealer first. from the dealer’s general funds and can never be used as collateral (security for a loan). 30  CHAPTER 3 3.09 Definitions FAST FACTS A trust account is an consignment: when a dealer (consignee) sells a vehicle on behalf of the account at a bank owner (consignor) for a fee. Although the consignee has possession of the or other financial vehicle, the consignor is still the owner until the sale is complete. institution that holds money for deposit: money paid in advance for buy