The 8 Steps of Compliance Recovery

Here are eight steps to total dealership compliance and relapse prevention


Like you, I have friends and associates who’ve pulled their lives from the brink of destruction by following the creeds of various 12-step programs.

They tell me those who remain healthy practice these steps consistently, day after day, and set up hedges against ways of thinking that can shipwreck their recovery.

Until recently, I’d not seen this similarity between sobriety rehabilitation and auto dealership compliance.

The concepts are different, yet alike: The first consists of individuals who’ve gotten themselves caught up in addictive behaviors; the second consists of dealerships that create a risk to customers, employees, and their reputations by reckless attitudes toward regulatory compliance.

So, with a salute of utmost respect to the original Twelve Steps, here are eight steps to total dealership compliance and relapse prevention.

Step 1:

Admit my dealership is powerless over compliance regulators.

There is no one aspect of your business not regulated today. We can now add recall safety issues to this list.

It is a serious oversight, hubris that assumes a dealership is not a likely candidate for a government audit—or a civil suit from a consumer or employee who believes he or she has been violated due to alleged neglect of adherence to compliance best practices.

Step 2:

Conclude that a source other than ourselves might help us comply.

Many dealers, large groups among them, have found that the compliance minutia that must be identified, managed, corrected, and audited is formidable, exhausting, and not their specialty.

Outside compliance services can be a godsend. Be sure the service you retain to review your practices and train your people specialize in automotive retail compliance; many regulations and demands are unique to the business.

Step 3:

Decide to be compliant.

The biggest obstacle to becoming a compliant dealership is an ambivalent or contrarian attitude toward this practice. Dealers who conclude they must cooperate and operate a compliant dealership do so.

Step 4:

Make a searching inventory of compliance risks.

You cannot address what you don’t know. Welcome a top-to-bottom compliance audit.

This audit should examine existing efforts and ask probing questions of personnel. Done right, it will identify training and documentation needs (to help ensure ongoing adherence to compliance practices), and reinforce correct practices.

Be sure findings and measures used to address them are documented and this documentation, whether paper or digital, and be readily available for a regulator’s surprise visit.

Step 5:

Admit my oversights.

Weaknesses not corrected are likely to cost you money in penalties, fines, lawsuits, and punitive damages, so own up to—and correct—sloppy, noncompliant practices quickly, if found.

Step 6:

Make myself completely ready to get things in order.

Let loose your compliance team. Insist it has unhindered access to sales documents and deal jackets, HR policies, accounting and cash-handling practices, OSHA-related documentation, advertisements, warranty records, computer networks, and your F&I practices.

Prepare staff for these audits, and require that they comply promptly with requests for documents and records. Make yourself and key managers available for interviews and other discussions about compliant practices.

The team will want to scrutinize fixed operations, your lot and buildings, and audit a sampling of deal jackets.

Step 7:

Humbly ask to make myself compliant.

This action pulls the trigger, and writes the check that makes happen the improvements identified in the prior steps.

Step 8:

Continue to take a compliance inventory, and where risks are found, correct them immediately.

An audit, personnel training, and updating documentation will fine-tune your dealership’s compliance engine. Over time, however, even clocks lose precision.

Retain professionals to audit your compliant practices several times a year to correct risk creep.

Former auto dealer and operator, Terry Dortch is president of Automotive Compliance Consultants, Crystal Lake, Illinois, a KPA company. Reach him at terry_dortch@compliantnow.com.

Terry Dortch

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