Best Practices Aug 8th, 2022

10 + 10 = Exposure

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Answers these questions honestly:


  1. Do you have a Compliance Management System (CMS) and whose responsibility is it?
  2. When was the last enterprise risk assessment to ensure all personal and dealership assets are protected? (Who has looked at the “big picture?”)
  3. Who trains the staff about compliance and how often?
  4. Has anyone ever done an analysis of your insurance policies to determine if there are any holes in your coverage?  
  5. Do you have a process at the dealership to find and fix online consumer complaints?
  6. Do employees have a channel and mechanism to bring their complaints to the attention of management? 
  7. When was the last update to the Employee Guidebook? Do employees sign a Legal Rights Agreement?
  8. Are you using arbitration to settle disputes with consumers? (In practice, do you understand why this strategy is highly ineffective?)
  9. Are you prepared for a local media story? Do your employees know what to do, what to say, or who to direct the reporter to?
  10. Who audits your websites on a monthly basis to ensure compliance with advertising laws? Who inspects your other advertising?

  

Does your dealership have work to do? 

Any one of these issues could cost you a lot of money.  

Remember, it’s not how much money you make that’s important.  What’s critical is how much money you keep!

Consider the “what if.”  What if…this were to happen or that were to happen?  How would you handle it?


If those ten (10) didn’t stimulate you enough, here are another ten (10):

  1. What would you do if a regulator walked into your dealership? Do you have a plan as to how you would handle that situation
  2. One very large dealership group with more than eighty (80) stores allowed the Federal Trade Commission (FTC) to survey its customers to ask them about potential dealership wrongdoing.  What would be your thinking here? How would you handle that? 
  3. Have you started your work on the new Gramm Leach Bliley regulations?  The deadline is December 9. Unfortunately, the new regulations are complicated enough that you cannot simply write a check for an “app” to be compliant.  Some of your work will require good ol’ fashioned shoe leather. 
  4. Is anyone tracking how your waste (oil, batteries, tires etc.) is being disposed of and have you ensured your vendors have the adequate insurance to protect the dealership if it’s not handled properly? 
  5. Do you have a recall policy for your used vehicles?  Whether or not the used car is “your brand,” did you know the dealership would likely be liable if a customer were in an accident as the result of an unfixed recall?
  6. Have you ever checked to see how your IRS 8300 processes are working?  Are your cashiers receipting in monies with enough detail for you to track the transactions?  (Did you know the fines for non-compliance are up to $3 million and potential jail time?) 
  7. Did you recently inspect your Red Flag compliance?  Are your F&I managers just “blowing past” that screen and selling vehicles without paying attention?  This is a critical issue which will help in your defense if you are ever taken to court for selling a vehicle to someone with a stolen identity.
  8. As a dealership, are you sending out Adverse Action Notices in compliance with the Fair Credit Reporting Act (FCRA)?  Failure to send these could result in a class action lawsuit to include punitive damages for “willful non-compliance.”
  9. Are you selling repossessed vehicles or salvage vehicles without disclosing this status?
  10. Does your staff know how to handle an Office of Foreign Asset Control (OFAC) “hit” on a potential buyer’s credit application?  Do you have a procedure in place?

 

These questions are but a few of the concerns for your dealership when you are thinking about your daily risk.  As one dealer friend of mine advises, “Button up!”. Another says, “Stop everyone from reaching into your pocket!”

Practice your “what ifs” and prepare!  

In my experience, it’s not necessarily “if,” but “when!”

Watch the YouTube video here.

Check out Tom Kline's YouTube Channel for relevant information which is at the forefront of sharing preventative measures and insightful actions that you can take today to protect your dealership.

Tom Kline DMM Expert

Tom Kline

DMM Expert

A dealership franchise owner for thirty years, Tom is now the Lead Consultant & Founder of Better Vantage Point, providing Dealer Dispute, Compliance and Risk Mitigation Solutions.

Tom also spearheads Tuck The Octopus which helps dealerships proactively manage governance, risk and compliance which has a direct impact on the customer experience.

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