Categories
Compliance

May I Text You?

Contributing Author: Steve Roennau Vice President Compliance EFG Companies
Contributing Author:
Steve Roennau
Vice President
EFG Companies

This might seem like a trite question in today’s digital, over-socialized world. While obtaining permission from a customer to text them has always been a legal requirement, recent court cases have reminded the retail automotive industry that indeed, dealerships must have permission prior to sending a text.  

In the past, regulators were focused on companies sending out marketing texts to customers they did not have permission to text. Now, regulations may be enforced on something as simple as a salesperson texting a customer with a follow-up message on an available vehicle.

Telephone Consumer Protection Act

Specifically, the Telephone Consumer Protection Act (TCPA) governs any dealership’s phone call or text message marketing. Let’s review the rules under the TCPA.

If you want to send a customer a text message, you must obtain prior written consent before sending anything. Written consent can include hand-written signatures or even a simple email. You can also obtain consent by including it in your contact form on your website. Simply add a checkbox asking if the customer consents to being contacted via email, phone call, or text.

You may call/text your current customers and former customers for 18 months after your relationship with them ends, even if they are on the national Do-Not-Call list. This includes both sales and service relationships, i.e., when they buy a car or even rotate their tires.

Categories
Compliance Data Security

What IS a CISO?

Contributing Author:
Maurice Hamilton
Vice President
EFG Companies

If you’re in the retail automotive business, you’re used to dealing with regulations and compliance issues. It’s simply part of doing business. However, sometimes when a new regulation comes down, it’s all too easy to balk at the potential increased cost in both financial and time investment to implement them. Right now, there is a lot of talk about updating the Safeguards Rule, and the potential business impact.

Let’s step back and look at the regulation. As part of the Gramm-Leach-Bliley Act, the Safeguards Rule was designed to protect the security, confidentiality, and integrity of customer information.

16 CFR Part 314 Rule Summary:

The Safeguards Rule requires financial institutions under FTC jurisdiction to have measures in place to keep customer information secure. In addition to developing their own safeguards, companies covered by the Rule are responsible for taking steps to ensure that their affiliates and service providers safeguard customer information in their care.

While it is in the inherent best interest of a dealership and its partners to protect and secure customer data, a new wrinkle was recently added that has many in retail automotive scratching their heads. The April 4th issue of the Federal Register contained an update to the Federal Trade Commission’s Notice of Proposed Rulemaking concerning the Safeguards Rule. This issue included several additional requirements that will impact dealerships. One of the most pervasive is the requirement for a Chief Information Security Officer (CISO), which begs the question – what the heck is a CISO and where do you find one?

Categories
Compliance

Bank Fraud in the Dealership

Contributing Author:
Jason Hash
Training Manager
EFG Companies

One of the biggest compliance concerns discussed at this year’s F&I Industry Summit was bank fraud. Just this past summer, two auto groups made headlines for falsifying loan documents. So, how do you keep your dealership out of the headlines?

Start by understanding what bank fraud entails. In a traditional retail installment contract, bank fraud can occur in a number of ways:

  • misrepresentation on the credit application, such as with consumer income, down payment information, or stability;
  • misidentification of the buyer as someone else;
  • falsification of vehicle information with options the vehicle doesn’t have to augment the size of the loan; and,
  • failing to report to the IRS cash receivables of more than $10,000 for a single transaction.