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Dealership Compliance

Who’s Liable for Dealership Compliance?

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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Consumer Finance Dealership Compliance

Risk-Based Pricing Rule

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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Consumer Finance Dealership Compliance

OFAC & Dealerships

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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Dealership Compliance

IRS 8300 Cash Reporting Rule

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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Consumer Finance Dealership Compliance

The “Red Flags” Rule: Are You Compliant?

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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Dealership Compliance

The Used Car Rule (FTC Buyer’s Guide)

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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Dealership Compliance

Federal Laws Impacting Auto Dealers

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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Consumer Finance Dealership Compliance

Gramm-Leach-Bliley: “Privacy Rule”

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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Consumer Finance Dealership Compliance

Gramm-Leach-Bliley: “Safeguards Rule”

The Safeguards Rule requires financial institutions (defined to include dealers who play any part in financing or leasing) to develop and maintain an “information security program” to protect the confidentiality and integrity of personal consumer information.

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Dealership Compliance

Truth in Lending – Dealer Advertisements

According to the Federal Reserve Board an advertisement is any “commercial message in any medium that promotes, directly, or indirectly, a credit transaction.” As you can see they have a pretty broad definition of advertisement. Telephone solicitations, internet messages, and price tags with credit information are among the more surprising forms of “advertisements” listed by the Federal Reserve Board.