Michael Ford (post until Oct. 31/19)
Licensing

Onus on dealers to ensure advertising is clear, truthful

Toronto licensing and compliance lawyer Anar Dewshi says car dealers should be careful about who they hire to create marketing campaigns as the onus is on dealers to make sure that their advertising is legal, ethical, and truthful.

Dewshi makes her comments in connection with news that a British Columbia dealership implemented a direct marketing campaign which included the distribution of materials that had the potential to mislead consumers.

“A flyer aimed at hooking would-be car buyers with a so-called ‘Canada Automotive Rebate Program’ is causing anger, confusion and attracting the attention of advertising regulators,” the CBC reports. “The official-looking advertising mail-out sent by a Surrey auto dealership during tax time urges the recipient to ‘Act Now,’ promising to match the person's 2015 tax refund by up to $1,000 if funds are applied to the purchase of a new or used vehicle.”

The problem with the program is that it doesn't exist.

The Ontario Motor Vehicle Industry Council (OMVIC) recently posted a dealer bulletin about this marketing campaign, noting that leading consumers to believe information has been provided by, or on behalf of, the government and/or as part of a rebate/incentive program is misleading and deceptive and violates the Motor Vehicle Dealers Act (MVDA) and Code of Ethics.

Dewshi, principal of Dewshi Law Practice, explains that under the MVDA, all representations, including advertising, placed by or on behalf of a registrant, must be legal, decent, ethical and truthful.

“Dealers are reminded that they must be clear and truthful in describing the features, benefits and prices connected with the motor vehicles in which the registrant trades and in explaining the products, services, programs and prices connected with those vehicles in all marketing and advertising campaigns,” she tells AdvocateDaily.com.

The general manager of the Surrey dealership told the CBC he regrets the campaign and called it a "complete disaster."

"In the month of March, we, Haley Dodge, participated in a marketing campaign run by an outside company,” Billy Dhaliwal told the publication. “We trusted that the marketing company we used would be compliant with all rules and regulations set forth by Advertising Standards Canada but understand that, in this case, they were not."

Dewshi says it’s irrelevant who created the campaign because the final decision regarding implementation should come from the dealer.  

“Not only should dealers ensure that they hire marketing/advertising specialists that are credible, they should also verify and validate that the campaign complies with the MVDA,” she says.  

If this campaign happened in Ontario, Dewshi says dealer fines/undertakings/sanctions could include:

  • Fraud charges under the Criminal Code;
  • A Discipline hearing, where OMVIC could order the dealer to cease the use of the material, issue a retraction or correction, and/or pay a monetary fine;
  • A Proposal to revoke registration before the License Appeal Tribunal; and
  • A requirement to submit all advertising to the Registrar for pre-approval for a period of up to two years.

She adds that dealers could also be found in contravention of the Consumer Protection Act or be reported to the Better Business Bureau.

The Surrey dealership was ordered to pay a $3,400 fine and comply with a list of undertakings including a review of advertising procedures and an audit of business records.

 

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