To maintain a healthy stance on the Combating Auto Retail Scams (CARS)
Rule, consider conducting a "temperature" check of your dealership.
The CARS Rule must be at the top of your temperature checklist because it is essential to your operating well-being. Your compliance position with other rules I'll mention here helps you solve CARS Rule issues.
The Federal Trade Commission has finalized a new rule to fight two common illegal tactics consumers face when buying a car: bait-and-switch tactics and hidden junk fees.
HERE'S HOW YOU DO THAT:
FTC Policies: The Truth in Lending Act and its Regulation Z is intended to help consumers understand their credit terms and compare them more readily and knowledgeably. Missteps here are often an oversight in processes or a misunderstanding of how the regulation applies to the vehicle transaction's marketing, sales and closing.
People Policies: Identify employee practices and policies. Ensure a consistent hiring practice is used for every candidate, which will vary by department. Review non-discrimination practices and compare them to your hiring methods. Get truthful about employee behaviors you allow or tolerate that might raise regulators' concerns. How updated is your policy regarding marijuana laws in your state and gender matters regarding staff and public restrooms?
Privacy Policies: Do you have an Information Security Plan to protect customer data? How compliant are you with Do Not Call and CANSPAM laws7 Does your business manager have enough knowledge in the intricate compliance arena of F&I to ward off potential lawsuits?
Policing Policies: A service department spot check can identify risks to health and safety. Look for fire extinguishers prominently displayed and identified. Check for evacuation Exit signs. Make sure eye and face wash protection is near workstations, grinders and welders. Check your air bag, ICE and EV battery handling and disposal practices. Are Safety Data Sheets available for the hazardous chemicals and products used in service, and do all employees know where to access this information? Are technicians in danger of bodily harm by long hair or loose clothing being pulled into machinery?
CONSIDER:
1. Your comfort level with the latest set of eyes reviewing paperwork.
2. F&I is the most litigated profit center.
3. Staff understanding of the entire function of the product menu.
4. Office of Foreign Assets Control (OFAC) compliance with every customer.
5. Deal jacket inspection to ensure established process compliance to the letter.
6. Updated Code of Ethics statements signed by all applicable staff.
7. Compliance with the Red Flags Rule, or are employees pushing a software checklist button without knowing why?
8. Charges and costs may be brought against dealership staff who ignore compliance responsibilities and regulations and may face violation fines and criminal charges.
9. That consistent, standardized processes are more profitable and produce far fewer issues.
Protection Policies: Are your managers and employees trained in the latest Equal Employment Opportunity Commission (EEOC) policies? Are you aware of court decisions about employers who fail to train their managers on the laws?
ALSO CONSIDER:
1. Are managers trained in what documentation must be completed to prepare for an employee separation?
2. What are your Americans with Disabilities Act policies 7
3. Do you have a written sexual harassment policy and process for reporting and investigating?
4. What protection does your harassment policy afford those harassed?
5. When did you last update your employee and manager training programs?
6. How updated are your pay plans to your state's pay laws?
7. Do you have a separation agreement to protect your dealership against future claims?
A dealer cannot dismiss, ignore or minimize the importance and necessity of having compliant practices and procedures and regularly policing and revising the dealership's compliance program. Do these well and correctly, and the CARS Rule should take care of itself.
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