One of the most important questions you can ask yourself as a business owner is “am I doing everything I can to protect my dealership from litigation?” We all know that our industry is one of the most regulated enterprises in business today, a fact that gains even more significance in light of the Dodd-Frank Act and the creation of the Consumer Financial Protection Bureau. In addition, there are also abundant federal regulations to consider, as well as substantial state laws, consumer confidentiality concerns, information security responsibilities, and general industry best practices that you need to keep in mind.
With so many rules and regulatory agencies out there, staying compliant can be a confusing endeavor to say the least.
With so many rules and regulatory agencies out there, staying compliant can be a confusing endeavor to say the least. To make matters worse, many dealers only become aware of compliance issues when it’s too late to do anything constructive about them. Imagine having your usual daily routine interrupted by a phone call from a state or federal regulator or auditor ready to take action against your business. The old “I didn’t know about that law” is not an acceptable excuse to these people. Facing a lawsuit, even a civil case, is simply not a comfortable thought.
The reality of the situation is that in today’s legal climate, you simply cannot afford to take a laid back attitude when it comes to legal compliance. All it takes is a single customer complaint to an attorney and your dealership could be subject to a lawsuit, leading to a devastating chain of consequences. What’s more is that with the formation of the Consumer Financial Protection Bureau (CFPB), your customers don’t even need a lawyer to open an investigation. All they have to do is submit a complaint to the CFPB website, and investigators could be knocking on your door soon after.
As a former car dealer myself, I understand that it’s often difficult to find the time to think about these types of issues. Let’s be honest here, compliance isn’t exactly a profit center after all. However, just stop and think for a moment about what can happen if you don’t spend the time to protect yourself. Can your dealership withstand all the baggage that comes with a lawsuit; the bad press, the fines, settlements, and disruptions to business? I didn’t think so.
The sad fact of the matter is that because the CFPB is a relatively new organization, they’re going to want to make an example of in-house finance dealerships and validate their existence. Don’t become that example. Perhaps you think that a lawsuit can’t happen to you, and you can therefore ignore compliance issues in favor of more profitable work, but trust me, you don’t want to go down that road. The best thing you can do to protect your business is to be prepared, and learn as much as you can about compliance so that you can start making the necessary adjustments now, before it’s too late. Arm yourself with knowledge, and share that knowledge with your team.
Now, don’t get the wrong idea, I’m not trying to scare you. However it is vital that you are aware of compliance issues and take them seriously. By picking up this issue of A*QUA, you’re already taking a step in the right direction. We’ve filled this issue with information from legal and industry experts that will help you stay compliant and out of trouble. In this issue, you’ll discover how to advertise without breaking the law, how to protect your sensitive data, how to handle an audit, and will learn more about the Dodd-Frank Act, and the CFPB. Do your business a favor and take the advice you find in this issue to heart. If you’re ready to take the next step, visit our website and register for our upcoming Innovate conference where we will cover even more in-depth information to help you protect your business from compliancy issues.