Avoiding the Pitfalls of Dealership Compliance

Avoiding the Pitfalls of Dealership Compliance

Here are some of the reasons your compliance program might not be working as well as it should be.

How long has it been since you checked on your compliance policy?

It’s no secret that compliance laws seem to be changing more and more frequently these days, making it increasingly difficult to adhere to government regulations and making a dealership compliance policy an imperative. However, many dealers continue to view compliance as a one-time adjustment they can make and then forget about. Without proper follow-up, a compliance policy on its own offers little protection against costly violations. Here are some of the reasons your compliance program might not be working as well as it should be.

You Don’t Know What You Don’t Know

Do your employees know the law? In the big, complicated world of compliance, ignorance is not bliss, and claiming “I didn’t know” will not suffice in an FTC inquiry. Many dealership employees have never been properly trained in compliance matters, so they simply rely on doing business the way it’s always been done. Or, even if they were trained at one time, do they stay informed of all Consumer Financial Protection Bureau (CFPB) updates? Ultimately, it is the dealership that is responsible for employee actions and that will be subject to civil and criminal penalties. 

Lack of Follow-Through

How often have you put a new policy in place only to find in a deal audit months later that the policy has gone by the wayside or was never implemented at all? You may have dedicated the time and resources up front, but let’s face it, old habits are hard to break. 

Without consistent checks and follow-up, employees will resort back to what they’ve always done, what they’re comfortable with. Make sure employees understand the changes and the long-term benefits to them and the dealership. They need to know that management supports these changes and is committed to enforcing them. Have regular meetings with your employees and designated compliance personnel to ensure new policies are being implemented. If your people have not been properly trained and supervised, even the best programs will fail. It is vital to have all employees on the same page when it comes to compliance issues. 

Compliance Complacency 

It’s not enough to put compliance procedures in place; you have to make sure they stay in place. Policies change frequently, and compliance means being aware of the changes and revising your own program accordingly. For example, how often has your dealership revisited its Safeguards policy since the FTC Financial Information Safeguards Rule took effect in 2003? If your answer is “never” or “not sure,” then it’s definitely time to reevaluate your procedures and bring them up to date to coincide with your current operations. Don’t wait until you receive a subpoena or an inquiry from the FTC to determine whether your current policies are up to par. Be proactive!

Violations are costly and time-consuming, and they can jeopardize a dealership’s hard-earned reputation. The FTC website (www.ftc.gov) contains recent stories of dealerships facing legal action and hefty fines (from a few thousand dollars to a few million!) as the result of questionable practices. Knowing and understanding the laws, following through with the policies you put in place, and keeping them up to date can save you a lot of time and aggravation down the road.

You May Also Like

‘The Password is…’A Brief History of, and Best Practices for, Today’s Passwords

Discover actionable steps to enhance your security, such as two-factor authentication, unique and complex passwords, and comprehensive phishing training for employees.

Best Practices for Today’s Passwords

The need for consistent password review and management is more important than ever. 

Those of us of a certain age may remember a television game show called “Password.”  The goal of the game was to guess the password using a one-word clue given by a contestant. A collection of passwords would then lead the contestant to guess the puzzle affiliated with the passwords to win the game.

The Smart Shift: How Dealerships Are Slashing Processing Costs

The rising trend of dual pricing and surcharging mechanisms is proving instrumental in significantly lowering processing costs.

The Smart Shift: How Dealerships Are Slashing Processing Costs
Navigating Title Clerk Transitions

Discover solutions for dealership title clerk shortages to avoid backlogs and ensure smooth vehicle sales and registration processes.

Navigating Title Clerk Transitions
How Will Advanced Automotive Technology Showcased at CES 2024 Impact F&I Protection Products for Dealers?

By offering the right F&I products that embrace vehicle innovations, dealers can ensure their customers are navigating the roads with confidence.

Advanced Automotive Technology Showcased at CES 2024
Cybersecurity for Dealerships

Now is the time to take a proactive approach to protecting your dealership’s and customer’s most sensitive information by adopting a comprehensive approach to your cybersecurity.

Cybersecurity for Dealerships

Other Posts

Proactive Dealer Solutions Achieves Multiple Compliances

Certification is part of the company’s mission to deliver exceptional service while maintaining a secure environment for all client data.

COMPLIANCE: A Necessary Evil or a Million-Dollar Mistake?

Explore the complexities of digital privacy in business, including the impact of consent banners on marketing analytics and the balance between legal compliance and operational effectiveness. Learn how to navigate the risks and rewards of digital data management.

Sorting the Latest GA4 Confusion

If you’re stumped by the new Google analytics, take some solace in that you are not alone. Here’s some help.

Sorting the Latest GA4 Confusion-Remora, Google Analytics,
BendPak Introduces New Octa-Flex Lift: Inside Look

Susan Givens has a discussion with Sean Price from BendPak about the groundbreaking Octa-Flex Series concept two-post lift.