Tag: FTC

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Compliance

Compliance Still Matters

Powersports dealers have a myriad of challenges facing them today. Between sky-high interest rates and waning consumer demand, profit margins are beginning to feel the sting of a market that is on the precipice of right-sizing. With this mounting pressure, dealers are rightly concerned about how to maintain their profit margins in the weeks and months ahead. All too often, when the going gets tough, compliance falls to the wayside, and you may be asking yourself, “where is the CFPB anyway?”

The CFPB and FTC have not been making waves like they have in the past, but that does not mean they are not present. In fact, the CFPB has been busy this year bringing lawsuits against auto lenders and servicers. You may think that since these suits don’t affect you or your industry, you don’t need to worry.

If that is you, consider this. 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. So far this year, the Federal Trade Commission (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. This is a great example of why policies like the FTC Safeguards rule were put in place. Compliance procedures often serve as critical guard rails that can protect your customer’s data – and your dealership.

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Data Security

Yes – Data Compliance Applies to You

One of the biggest misconceptions among powersports dealers is the belief that many state and federal compliance regulations do not apply to them. Nothing could be farther from the truth! In many states, motorcycle dealers are covered under “New Motor Vehicle Dealer” statutes that were written for automotive retail. Eight states have laws that specifically address powersports dealers. Another 17 states have “Franchised Dealer” statutes that define a dealer agreement as a franchise agreement, regardless of what an OEM wants to call it. Dealer-OEM relations may also be covered by multiple laws within a state.

From a federal regulatory standpoint, the Federal Trade Commission has regulations that impact automotive, recreational vehicle, and powersports dealers nationwide. Beginning on June 9, those compliance requirements will expand significantly as the updated Safeguards Rule goes into effect. These stringent requirements relate to information security practices in your dealership. In our current environment of data breaches, security hacks and stolen identities, failure to comply with these requirements could mean expensive fines, lost trust from your customers, lenders, and the community, as well as crippling cybersecurity issues. Let’s break down the details and see what steps you need to take to protect your dealership and your customers.

What is the Safeguards Rule?

Originally enacted in 2003, the FTC amended the Safeguards Rule in 2021 but extended the deadline for compliance to June 9th of this year, giving dealerships more time to incorporate the needed equipment, training and procedures. Specifically, the new requirements include:

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Uncategorized

Stay Flexible This Fall

Fall is in full swing and the powersports market should be experiencing its annual turnover of moving inventory out so that new units can be showcased on the sales floor. However, inventory challenges continue to plague 2021 sales, with many analysts forecasting continued issues into 2022. In a recent article in the Wall Street Journal, companies such as Polaris offer a glimpse into the numerous issues facing a powersports OEM, which has trickle-down impact on dealers and ultimately customers.

Flexibility should be the mantra this fall as supply chain issues continue to work their way through the industry. For example, Polaris is changing its manufacturing and sales strategies on the fly to cope with shortages of materials and parts. The company said it is juggling approximately 30 + supply-chain constraints for its units, sometimes changing its plans daily for what it produces.

This story has played out in the retail sales numbers across manufacturers. Coming off an historical 2020, the August major unit sales declined 1.4 percent overall in the US. This is not reflective of demand, which remains high. It speaks to inventory, or the lack thereof.  Where dealers are usually offering sales ‘blow-outs,’ many are now scrounging for units.

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