Why Dealerships Should Close Compliance Gaps Before Year End
Key takeaways
- Dealerships that missed the June 9th Safeguards Rule deadline should still act now rather than wait, since fall and the holidays make the rest of the year fill up quickly.
- Cyber security under the Safeguards Rule is an issue dealerships need to address, but the speaker believes TILA violations and other auditing processes tied to F&I and sales department actions pose a bigger risk.
- Dealership audits cover OSHA, Safeguards, and other processes, and compliance planning should include physical practices in the F&I office and sales department, not just electronic security.
- Taking time to assess compliance needs before year end helps a dealership make an informed business decision about how to address any gaps.
Summary
As summer winds down and fall approaches, dealerships that missed the FTC Safeguards Rule deadline back in June still have time to close that gap before the holiday rush makes everything harder to schedule. Waiting until year-end compounds the problem, since compliance reviews take time to do properly, and the calendar only gets more crowded as November and the holidays approach. The message is simple: if compliance issues have been sitting untouched, now is the window to assess them and get the information needed to make a sound business decision, whether that means working with ARMP or another resource.
Beyond cyber security, Terry Dortch argues the bigger exposure often sits in day-to-day dealership operations, including Truth in Lending Act violations and issues that surface in OSHA and Safeguards-related audits tied to what happens in the F&I office and sales department. For a dealer principal or F&I director planning remaining compliance work for the year, the takeaway is to look at the full picture rather than treating cyber security as a checkbox, since physical process gaps in deals and paperwork are frequently what come back to cause real problems if a dispute or audit arises.
Transcript
Reflecting on the Safeguards deadline and time passing
Hi, I'm Terry Dortch, Automotive Risk Management Partners. Um, you know, it's funny, here we are — don't shoot me for this — summer's almost over, guys. We're really coming to the conclusion of our summer. Um, here it is mid-July, almost, you know, almost the end of July really, and before we know it fall is going to be here.
Urging dealers to address missed compliance gaps now
And the reason I bring that up is that, you know, a lot of times we in business, we have all these plans laid out at the beginning of the year and we maybe haven't quite fulfilled them or haven't quite done everything that we wanted to do or accomplish. I guess the reason I'm bringing it up is that if, during this haste with that whole deadline for the Safeguards Rule, if for some reason you missed it, um, you know, and you think that there's a need for you to try and fill that void, now's the time to do it. Let's try to get out and contact everyone, because the closer we get, obviously, to November, the closer you get to the holidays, and those days that everything starts to get crammed in, and really the year, before you know it, is gone.
Getting information to make a business decision
Um, it takes some time to assess whether or not you think you need to talk to anyone about compliance, is what I'm saying, before the end of the year. And if you do, and if we happen to be an option, you know, give us a call. We'll be more than happy to sit down and talk to you. I think it's imperative that if you haven't taken the time to really address any of your compliance issues, that you try to do that, at least to get all the information you need so that you can make a good business decision as far as what you want to do and how you want to address those issues.
Cyber security versus TILA and F&I auditing risks
And I'm saying this — I know that everybody was up against this deadline of June 9th and everything, and I'll be the first to tell you I still think that cyber security is an issue we need to be concerned with. But I really do think that the bigger issue is all the Tila violations and the other auditing processes that go on, from an OSHA standpoint, from a Safeguards standpoint, where the actions that occur in your F&I office and in your sales department — those things are really the ones that are going to come back and haunt you if there's ever a problem. What's your — what's your things that we audit for?
Considering physical compliance, not just electronic
So when you're looking at your compliance needs for the rest of the year and you're trying to decide whether you're going to attack certain things, or what you're going to do, um, please make sure you take into consideration the whole aspect of the physical part of this, not just — excuse me — not just the electronic part.
Contact information
So if you have any questions or anything, please feel free to give us a call, check us out, you know, you can send us an email or anything from the website. Our number, web address, is right here on the screen. Feel free to give us a buzz, we'll be more than happy to talk to you. Um, so thanks for listening, and take care.
Questions this video answers
We missed the June 9th Safeguards Rule deadline. Is it too late to address it?
No, the speaker says if you missed the deadline and think there's a need to fill that void, now is the time to do it, before fall and the holidays make the rest of the year get crammed and gone.
Should we focus only on cyber security for compliance, or is there more to worry about?
Cyber security is an issue to be concerned with, but the speaker thinks the bigger issue is TILA violations and other auditing processes from an OSHA and Safeguards standpoint tied to actions in the F&I office and sales department.
What should dealerships consider when planning compliance efforts for the rest of the year?
Dealerships should take into consideration the whole aspect of the physical part of compliance, not just the electronic part, when deciding what compliance issues to attack before the year ends.
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Covered in this video
- FTC Safeguards Rule
- Truth in Lending Act (TILA)
- OSHA
- F&I compliance auditing