Currently viewing the category: "Dealership Compliance"

How do you determine what finance rates your customers pay when they finance their vehicle purchase through your dealership? Many dealers permit their F&I staff to “mark up” whichever rate the finance company offers as its “buy rate”. In many cases, the F&I person has authority to choose any mark up they desire – some […]

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Internet advertising and the resulting rise in cross-border car and truck sales have become important issues for dealers across the country, including here in Washington. While the internet has made advertising and doing deals with customers in other states faster and easier, a simple sale can become complicated quickly.

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The vast majority of dealers want to follow the letter of the law but often have difficulty keeping up with the constant stream of new legislation impacting their business. Unfortunately, ignorance is no defense to a violation and sometimes what you don’t know can land you in jail.

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Effective January 1, 2011, the FTC’s Risk-Based Pricing Rule imposes a new disclosure requirement on creditors. This new rule was motivated by a concern that, because consumers are entitled to “adverse action” notices under the Fair Credit Reporting Act only when they are denied credit (or reject a counteroffer for credit), consumers are not adequately apprised of the effect credit reports have on the pricing of credit.

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OFAC is a database compiled by the Office of Foreign Assets Control which identifies “Specially Designated Nationals” (SDN) with whom you are prohibited from doing business. The penalties for conducting business with a person or entity listed in OFAC are some of the most severe you face as an auto dealer.

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The IRS 8300 Cash Reporting Rule wins the prize for “Law Most Likely to Get you Thrown in Jail for Inadvertent Non-Compliance”. Unfortunately, unless your staff is well versed in the rule and verifies each customer’s complete transaction history prior to accepting any form of payment, your store probably violates this rule on a monthly basis.

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The FTC “Red Flags” Rule has caused quite a stir in dealership circles. In fact, I’m asked about “Red Flags” more frequently than any other topic. Dealers are concerned about what the rules mean and how they will impact the way they do business.

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The Used Car Rule

On February 4, 2011 By

Traveling through Eastern Washington last winter an associate and I were shocked to discover a well-known franchise store violating the Used Car Rule. Bear in mind, this isn’t a small dealer we’re talking about – this is a dealer who owns multiple franchises and has been in business for years. In fact, he wasn’t merely violating the rule in a few instances, from the road I counted 75 used cars for sale that had no Buyer’s Guide – an $875,000.00 violation.

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Sometimes there is no substitute for reading the actual text of the law. For those times, or when you need some light bed time reading I’ve compiled this selection of the most important federal laws impacting auto dealers.

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The Privacy Rule requires financial institutions to give their customers privacy notices that explain the financial institution’s information collection and sharing practices. In turn, customers have the right to limit some sharing of their information.

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