Contributing Author: Karen Klees, Certified Consumer Credit Compliance Professional, EFG Companies
If you’ve been paying attention to industry news, you probably know about the Federal Trade Commission once again setting its sights on add-on products. While large industry players expected this on the heels of the CFPB’s increased oversight into auto lending practices, many dealerships looking to make up for lost dealer reserve with the sale of F&I products are looking to tighten up their policies and procedures.
If you haven’t already begun re-evaluating your compliance procedures, now is the perfect time! While there are many elements to consider as you review your current policies and procedures for your existing product offerings, there is an upside. When sold in a compliant manner, F&I products provide dealers the ultimate control in their profit potential.
This being said, applying compliance standards and scrutiny to your policies and procedures is growing in importance. A recommended starting point, as you evaluate your product offering, is to ask a simple question: Do your products’ benefits fulfill a real and mathematically calculable customer need?
Starting with this premise, here is a checklist to perform due diligence:
