Flex Those Compliance Muscles

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The Consumer Financial Protection Bureau (CFPB) has been busy this year bringing lawsuits against auto lenders and servicers. Just this month, the agency sued the servicing arm of U.S. Auto Sales, alleging USASF Servicing cost consumers more than $10.1 million by mishandling customer refunds, double billing for collateral protection insurance and failing to apply excess customer payments to interest. The suit also alleges that USASF Servicing wrongfully repossessed vehicles at least 82 times, erroneously triggered vehicle starter interrupter “kill switches” at least 7,500 times, and incorrectly activated a 10-second series of tones meant to signal late payments 71,000 times. Imagine the consumer’s surprise when their car won’t start or begins beeping – especially if their loan was in good standing or they weren’t informed of these archaic little features when they purchased the vehicle!

Speaking of annoying entanglements, I’m sure your dealership has been busy implementing policies and procedures designed to support the Federal Trade Commission (FTC) Safeguards Rule. While these added requirements may seem burdensome, here’s an interesting way to think about those guardrails surrounding the customer’s data.  So far this year, the FTC has received 5.7 million total fraud and identity theft reports, 1.4 million of which were identity theft cases accounting for $10.2 billion in losses. According to the National Council on Identity Theft Protection, there is an identity theft case every 22 seconds in the U.S. and 33 percent of all Americans have faced some kind of attempt in their lives, with experts predicting this number could increase significantly this year.

While the CFPB and FTC are focused on lender lawsuits and other fronts, there is an opportunity for retail automotive to take advantage of the lull. Now is a great time for your dealership to flex its compliance muscles.

Seven easy compliance steps to implement today

Think of compliance as muscle memory. If your dealership sales and F&I teams are in the habit of taking compliance steps every day, soon it will become a habit and standard operating procedure. Here are seven simple steps that keep that compliance muscle in tip top shape. While the steps below may seem very familiar, you’d be surprised how often these simple changes are overlooked, causing significant compliance headaches for everyone involved.

Organize your deal documentation

Don’t let sloppy deal folders or scattered paperwork put a kink in your compliance muscle. Make sure everyone understands the specific deal documentation process – and follows it every time.

Put your procedures in writing

Do you have new team members? Long term team members who like to cut corners? It’s easier to enforce compliance procedures if they’re written down.

Provide compliance-specific training and document it

Just like athletes’ train for their jobs, your team members need to train their compliance muscles. Whether it’s a refresher course or an A-to-Z overview, don’t assume your team understands the ‘why’ behind the ‘how’ of compliance procedures.

It’s also just as important to have documentation on all compliance training completed at your dealership. It is one thing to say you train on compliance, and another to properly document the subject matter, participants, and date of each training session.

Create an environment of compliance – and set the example

Embrace compliance in your dealership versus ignoring or dismissing it. Show off those fit compliance muscles and make it easy for everyone to come onboard.

Name a compliance officer

Everyone needs a coach and your compliance officer can lead the group, setting an example, training, and maintaining.

Establish a compliant management system

Just like circuit training, being in compliance requires specific steps to achieve success. Don’t let complaints fester! Have a system to manage them.

Take 5!

Whether it’s a water break or a stretch, every good coach takes five minutes to refocus the team. As a dealer principal, take five minutes every day to walk around your store with an eye towards compliance.

The good news – our proven team of EFG trainers bring years of compliance experience and fully flexed muscles to help.  We can easily come alongside your staff, assist with training needs, and help you implement your compliance system.  At EFG Companies, we’re more than an F&I provider, we’re your business partner with years of expertise in the retail automotive industry. Contact us today to learn more about how our team can help you achieve your winning strategy.

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