Services
Dealership Compliance
Dealership compliance has spread like wildfire since the passing of Dodd-Frank and the formation of the Consumer Finance Protection Bureau. There are numerous strict regulations, from F&I to marketing to inventory, and it’s our job to stay on top of them.
How is it possible to keep up? As an owner, protecting yourself from these dealership compliance issues is a big deal. The penalties are potentially enormous and career-ending for some situations, if you don’t watch your employees’ steps
At the same time, if you’re putting in the right amount of effort to stay on top of these issues, you’ll be fine. It’s all a matter of awareness, training, and prevention. Because there are so many regulations to adhere to, it’s wise to strategize so that no one in your dealership ends up breaking the rules. Blaming non-compliance as “an accident” won’t save you in a courtroom.
Our Strategies
Our Strategies for dealership compliance:
1. Assign a compliance officer (CO) to review and update your dealership’s policies.
It’s a law to designate a compliance officer in every dealership, and Emergent can help fulfill this role
We take this position and its responsibilities seriously.
Your officer is the spearhead of your compliance strategy. Send him or her to seminars, trainings, certification courses—anything that will help this person protect your dealership from exposure. Here are a few ideas that will benefit your dealership.
- Invest in training from the Association of Finance and Insurance Professionals (AFIP).
- Have CO teach best practices to the F&I and sales staff.
- Work with CO to create a standard procedure that follows all the rules.
2. We Review your Identity Theft Prevention Plan (ITPP) and train your staff
Identity theft prevention is paramount for car dealerships. The Red Flags Rule (RFR) mandates that your staff must be proficiently trained in examining the actual identity of your customers. The RFR is of particular importance because there are so many ways to fall into non-compliance, even when you think you’re doing it right. Besides training your staff to make more sales, you need to make sure they know who they’re selling to.
We don’t take these regulations for granted—identity theft is widespread in the U.S.
- Review your ITPP and update it with the latest practices set down by the RFR.
- Train your staff on how to identify red flags.
- Make a protocol of what to do if the salesperson is concerned about the identity of their customer.
- Always keep a document trail of all compliancescheduled / attended trainings.
3. Create a standard process for all your salespeople to streamline compliance
Those are only a few of the regulations your dealership must follow. The best way to stay fully compliant is to have your compliance officer provide quarterly trainings and audit sales files regularly.
- Adverse action notices
- Credit score disclosure notices
- OFAC checks on customers
- Gaining permissible purpose for credit reports
- Following all steps under the Red Flags Rule
Don’t let that happen. Create a standard process for your sales team. Hit every point necessary and make it clear that these steps are mandatory.
Most of your salespeople know about the various dealership compliance regulations, but they may not know them enough to understand all the angles and consequences. Some people will cut corners on these rules. They’ll get comfortable, go about every deal in a casual way, and then it’s on your head when they screw up.
4. Awareness and prevention are your greatest assets in dealership compliance
We’ve only skimmed the surface of the compliance issues facing car dealers today. The first thing a Dealer might want to do is figure out where their weak points are— dig in and get to the problem before someone else does. Add mandatory compliance training into your routine sales trainingthroughout the year.