Compliance has become an important topic in the retail car business as there has been a significant increase in enforcement from the FTC, staffing of the Consumer Financial Protection Bureau (CFPB) and activity from several state Attorney General Offices.
With these increases, many dealers are reevaluating the processes they have within their dealerships. Dealers can fall into a range of compliance, with some dealers compliant and up to date, while others may not be as stringent in their audit practices.
No matter where your dealership falls in this range, it is a good idea to review your current process to help ensure it is efficient and effective, beginning with the person who oversees the auditing function. This person should be well-trained and knowledgeable about the dealership and compliance rules and regulations, unbiased about the transactions in your dealership, and there should not be a conflict of interest between their role and how they are compensated.
Recently, our team did a deep dive on behalf of a large customer and found several consistent, compliance-related concerns. Our analysis showed odometer readings and customer compensations had been changed, missing federal disclosures and signatures, signatures that didn’t appear to match and additional issues within the sample information set.
To help prevent these errors, dealerships should ensure that the person overseeing the audit has the proper experience and training to identify potential compliance issues. They must also be objective, and their other responsibilities should not pose a conflict of interest to the audit process.
By reviewing your audit process, you can help to identify some potential gaps or oversights that could lead to compliance concerns. Once identified, your dealership can work to train and further develop this process to better meet your compliance needs.
For more information, please contact Francis Fagan with Brown & Brown Dealer Services at (312) 608-4979 or francis.fagan@bbrown.com. Francis is the Regional Training Director for Illinois and Indiana. At Brown & Brown Dealer Services, we put the emphasis on training. Visit www.bbdealerservices.com for our training calendar and to meet our nationally renowned trainers.
