Contributing Author: Karen Klees, Certified Consumer Credit Compliance Professional, EFG Companies
Earlier this month, the Federal Trade Commission (FTC) announced a planned study on the auto buying and financing experience. Since 2011, the FTC has brought more than 25 cases challenging illegal practices in the area of dealership business. These cases, combined with the Consumer Financial Protection Bureau’s (CFPB) investigation into auto financing, have most likely caused the FTC to take a close look at the retail automobile industry.
While the CFPB does not have jurisdiction over auto retail, it has created waves in the industry through auto finance regulations. Now that an agency with authority over the industry is taking a deeper look at dealership practices, it’s more important than ever to recognize and act upon the fact that it’s time for more transparency in the auto buying process.
The good news is the FTC is still in the exploratory phase of the study, asking for public comments and feedback from interested parties on how the study should be conducted. Meaning, they have a ways to go before they conduct the study, compile the results, and formulate an action plan based on those results. Dealers have time to take a closer look and tighten their processes before a large-scale investigation ensues.
