New Motor Dealer Act Rules to Protect Consumers
February 18, 2016
Government is strengthening its consumer legislation to increase protections for motor vehicle buyers – physically and financially. Minister of Public Safety and Solicitor General Minister Mike Morris today introduced amendments to the Motor Dealer Act of British Columbia.
The changes will add more certainty for consumers when purchasing a vehicle and build on the professionalism of the sector. Among the proposed changes is the expansion of who is regulated and licensed under the act to include used vehicle wholesalers, and broker agents who act on behalf of consumers when purchasing a vehicle.
The motor vehicle sales industry has been clear about the importance of licensing wholesalers to improve the disclosure of vehicle histories. As an unlicensed group, wholesalers have not had a legal obligation to disclose vehicle histories when selling vehicles to dealers. There has also been nothing in place to prohibit broker-agents from receiving money from both the buyer and seller, putting them in a position of conflict.
Government consulted with the New Car Dealers Association, the Automotive Retailers Association, the Recreational Vehicle Dealers Association and the Vehicle Sales Authority to draft the proposed changes.
Administrative penalties, compliance orders and undertakings will be added to the current administrative enforcement options and will improve the ability of the Vehicle Sales Authority (VSA) of British Columbia to address contraventions of the Motor Dealer Act.
Other changes to the Motor Dealer Act include:
- The creation of a new Consumer Advancement Fund to receive payments from administrative penalties under the Motor Dealer Act, which will be used to promote consumer and industry education.
- Providing for the transfer of oversight for the Customer Compensation Fund from government to the Vehicle Sales Authority, saving government time and expense in managing the fund.
- Enhancing fairness and transparency by modernizing and clarifying provisions for:
- service notices and orders under the act
- the publishing of licensing and enforcement decisions, and
- reconsiderations of enforcement actions by the regulator
- Providing regulation-making authority to establish and enforce a code of professional conduct for motor dealers, to further support a responsible and professional vehicle sales industry.
Mike Morris, Minister of Public Safety and Solicitor General –
“British Columbians deserve safe, reliable transportation and they deserve to know what they are buying. Failing to disclose damage on a vehicle, or rolling back the odometer is simply wrong. It can cause financial hardship, injury, even death. This government has taken a tough stance in order to protect B.C. consumers. I am proud of the work that has been done to keep B.C. drivers safe and keep money in their pockets.”
Jay Chambers, president, Vehicle Sales Authority –
”This important consumer protection legislation expands existing authorities by increasing the scope of current protections to previously unlicensed areas while enhancing other powers to add fairness, accessibility and efficiency.”
Ian Christman, registrar of Motor Dealers –
“Consumers are entitled to protection and to peace of mind when buying a motor vehicle. This includes being able to hold any person who is in the motor vehicle supply chain accountable if they have knowledge about a car’s history and may influence the purchasing decision of a consumer. They should be required to relay truthful and accurate information, act honestly and with proper disclosures and not take advantage of a consumer’s ignorance or other frailties.”
Blair Qualey, president and CEO, New Car Dealers Association of BC –
“This legislation helps to ensure that brokers, broker-agents and wholesalers are properly regulated and held to the same standards and level of accountability as new car and truck dealers. Consumers absolutely deserve full protection and transparency when making an investment as significant as a vehicle. This legislation addresses important regulatory gaps in the supply chain and helps to raise the level of accountability across our industry.”
Ken McCormack, president and CEO, Automotive Retailers Association –
“Motor dealers invest in their businesses and salespeople invest in their profession. Both are regulated and licensed in order to ensure consumers receive protection and peace of mind when purchasing a vehicle. Wholesalers, brokers, and broker-agent representatives are all part of the same supply chain. They should be held accountable to the same regulations and be required to always relay accurate information and be forthright with whom they conduct business.”
- The motor vehicle sales sector employs more than 36,000 full-time employees and contributes about $2 billion to B.C.’s economy annually.
- These changes bring B.C.’s motor vehicle sales regulations in alignment with Alberta, Saskatchewan, Manitoba and Ontario.
- A broker-agent is a company or a sole proprietor that offers to assist consumers in the purchase of a vehicle.
- A broker-agent representative is the individual who interacts with the consumer while working at a broker-agent. It is the equivalent of a licensed salesperson working for a licensed motor dealer.
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