Hawaii Pre-Licensing National Practice Exam

If several brokers from different companies discuss commission rates and one states a competing broker charges too little, what should the other brokers do?

1. Continue the discussion respectfully

2. Leave the meeting immediately

3. Report the broker to the authorities

4. Reassess their own commission rates

The correct answer is: Leave the meeting immediately

In situations where brokers from different companies engage in discussions about commission rates, any statement that critiques a competitor's pricing can raise significant legal and ethical concerns, particularly regarding antitrust laws and price-fixing. If one broker suggests that a competing broker charges too little, this could be perceived as an attempt to manipulate the market or engage in collusion among competitors, which is illegal. Leaving the meeting immediately is the most appropriate response, as it demonstrates a commitment to ethical practices and the avoidance of any behavior that could be construed as anti-competitive. By exiting the conversation, the other brokers mitigate the risk of being implicated in wrongful conduct and show that they do not endorse or support such discussions. Continuing the discussion may lead to further legal repercussions and could endanger the integrity of their own businesses. Reporting the broker to authorities may be necessary in some circumstances, but the immediate action that best protects all parties is to disengage from the conversation. Reassessing their own commission rates is a legitimate business practice but is not directly relevant to the immediate issue of the conversation about a competitor's pricing.