Better Vantage Point founder Tom Kline acknowledged that sometimes dealers think the Federal Trade Commission or the Consumer Financial Protection Bureau are too busy to go poking around their showrooms looking for malfeasance.
In a preview of his presentation for the Auto Intel Summit coming up in April, Kline explained why dealers should be wary of taking that approach as well as other compliance recommendations.
To listen to the conversation, click on the link available below.
Download and subscribe to the Auto Remarketing Podcast on iTunes.
CarMax said on Thursday that it has reached a settlement with the attorneys general of 36 states to resolve a 2014 inquiry surrounding its advertising and sales practices related to vehicle recalls.
According to a news release from New York attorney general Letitia James, the multistate coalition secured $1 million from CarMax for failing to disclose open safety recalls on used vehicles before delivery. The attorneys general said CarMax did not provide consumers with information about safety recalls on critical vehicle parts such as brakes and fuel pumps.
CarMax responded in its news release that since 2014 the retailer has been disclosing vehicle specific recall information in our sales process and online advertising. The company added that the settlement terms are consistent with CarMax’s longstanding practices.
“CarMax led the industry in recall transparency by sharing vehicle specific recall information in-store and online to ensure our customers know about open recalls prior to purchase,” CarMax chief operating officer Joe Wilson said. “In fact, as soon as NHTSA made available vehicle specific recall information in 2014, we began providing the information to customers nationwide and we continue to do so today.
“As CarMax is not authorized by manufacturers to complete recall repairs and close out recalls, we work hard to ensure our customers have the information they need to take action and have recalls repaired at a manufacturer-authorized facility,” Wilson added.
Along with New York, the other states involved in the settlement included:
—Alabama
—Arizona
—Arkansas
—Colorado
—Connecticut
—Delaware
—Florida
—Georgia
—Hawaii
—Illinois
—Iowa
—Kansas
—Kentucky
—Louisiana
—Massachusetts
—Michigan
—Minnesota
—Mississippi
—Nebraska
—Nevada
—New Jersey
—New Mexico
—North Carolina
—Oklahoma
—Oregon
—Pennsylvania
—Rhode Island
—South Carolina
—Tennessee
—Texas
—Utah
—Virginia
—Washington
—West Virginia
—Wisconsin
“Families need to know that their cars are safe,” North Carolina attorney general Josh Stein said in a statement. “I’m pleased that as a result of this settlement, CarMax will be upfront about potential vehicle safety and recall issues when North Carolinians are considering buying a used car from them. This information will help people to make the decision about the car that’s right for them.”
Vroom is facing a lawsuit from Texas attorney general Ken Paxton, which is charging the online used-vehicle retailer with deceptive trade practices.
According to a news release distributed on Wednesday, the lawsuit against Vroom, which also sells vehicles to Texas consumers under the name Texas Direct Auto, alleges that company has misrepresented and failed to disclose significant delays in transferring clear title and obtaining vehicle registrations, “burdening thousands of consumers.”
The state also alleges that Vroom has misrepresented and failed to disclose vehicle history and condition and terms of financing and approval — all violations of the Texas Deceptive Trade Practices Consumer Protection Act.
“According to the lawsuit, Vroom has not managed its growth effectively, leading to inadequate systems and procedures that have harmed Texas consumers,” Texas attorney general office said in the news release.
The news release also indicated that over the last three years, consumers have filed more than 5,000 complaints with both the Better Business Bureau and Texas attorney general against Vroom and Texas Direct Auto.
The entire lawsuit can be viewed via this website.
Roughly about a month after landing a relationship with Kentucky dealerships, ComplyNet this week secured a similar achievement with dealers in a bordering state.
The Illinois Automobile Dealers Association announced it chose ComplyNet as an endorsed partner of environmental, health, and safety (EHS) compliance solutions.
ComplyNet said through a news release that it will bring its 28 years of automotive-exclusive compliance solutions and expertise to IADA’s nearly 750 franchise dealer members throughout the state.
“We like ComplyNet’s approach to guiding dealers to a culture of compliance through participation and accountability using intuitive software solutions, and our members already highly recommend ComplyNet,” IADA executive director Joe McMahon said in the news release. “Not only will ComplyNet provide members with necessary solutions, ComplyNet will also participate with IADA in providing education and awareness efforts to prevent accidents, injuries, claims, and regulatory fines.
“If our efforts prevent a single accident and the employee go home safely at the end of the workday, then the time and commitment is well worth it,” McMahon continued.
ComplyNet provides compliance solutions to thousands of dealerships throughout the United States using ComplyNet’s ABLE platform, an end-to-end compliance management system that is geared to be intuitive and easy to use to helps dealerships track their efforts and achieve regulatory goals.
And along with the Bluegrass State, the firm now has the endorsement from dealers in the Land of Lincoln.
“ComplyNet was founded in Illinois and our team is extremely proud and humbled to have earned IADA’s endorsement,” ComplyNet president and general counsel Adam Crowell said.
“When it comes to dealership representation, IADA is a beacon of excellence, and we endeavor to assist IADA by providing best-in-class education, awareness, and tech-enabled solutions that are intuitive, easy to use, and comprehensive,” Crowell went on to say.
Arriving soon after hiring its new chief executive officer and rolling out a solution in collaboration with industry partner 700 Credit, ComplyNet continued its momentum last week, announcing that it’s now the preferred partner of compliance and risk mitigation solutions for the Kentucky Automobile Dealers Association (KADA)
ComplyNet will bring its 28 years of automotive-exclusive compliance expertise to KADA’s nearly 300 members throughout the state.
“Our dealers are heavily regulated and it was important for us to team-up with the most comprehensive provider of compliance and risk mitigation solutions in the auto industry,” KADA president Jason Wilson said in a news release.
“ComplyNet’s solutions cover a tremendous number of regulations across both the fixed and variable operations, and we are excited about ComplyNet’s approach to guiding dealers towards a compliance culture through top-to-bottom participation,” Wilson continued.
ComplyNet is a provider of compliance solutions to thousands of dealerships throughout the United States, emphasizing compliance and in the areas of environmental health and safety (EHS), sales and finance (F&I), human resources (HR) and privacy and safeguards.
And now franchised dealers in the Bluegrass State have an easier path to ComplyNet’s services.
“We are extremely proud to have partnered with KADA,” said Adam Crowell, president and general counsel of ComplyNet. “KADA’s representation of its dealer members is excellent, and our team endeavors to provide best-in-class education, awareness, and tech-enabled solutions that are intuitive, easy to use and comprehensive.”
In this special episode of the Auto Remarketing Podcast, ComplyNet president and general counsel Adam Crowell gave an update about mandates put forth by the Occupational Safety & Health Administration (OSHA) involving COVID-19 vaccinations and testing that now are being argued in federal court.
Crowell explained the court activities that happened over the weekend and what auctions, dealerships and other businesses that employ more than 100 workers are being asked to do.
To listen to the episode, click on the link available below, or visit the Auto Remarketing Podcast page.
Download and subscribe to the Auto Remarketing Podcast on iTunes or on Google Play.
The National Independent Automobile Dealers Association’s certified pre-owned program has been brought into an investigation by the NYC Department of Consumer and Worker Protection (DCWP) of multiple dealerships in New York City.
On Wednesday, DCWP commissioner Peter Hatch announced cases against two dealer groups — Kings Autoshow and JF Motors — which operate a total of five dealerships in Brooklyn and Queens. Hatch said these dealerships have been engaging in deceptive and unlawful trade practices that “preyed on vulnerable New Yorkers, as well as consumers from across the tristate area. “
DCWP’s cases, which will be heard at the city’s Office of Administrative Trials and Hearings (OATH), allege thousands of violations, including violations of the city’s new laws and rules designed to prevent “predatory conduct by the industry.”
In its case against Kings Autoshow, which operates two Brooklyn Mitsubishi locations, DCWP is charging the company with more than 7,000 violations and seeking more than $50,000 in restitution for 34 consumers, civil penalties and revocation of both of its dealership licenses.
The case against JF Motors includes Automania, Luxury Automotive Club and the now-closed World Auto, all of which are in Queens. DCWP is charging the JF Motors group of dealerships with more than 9,000 violations and seeking more than $100,000 in restitution for nine consumers, civil penalties and revocation of its two remaining licenses.
DCWP is also seeking to hold the respective owners and Brooklyn Mitsubishi’s general manager personally liable for the violations.
“These dealerships repeatedly victimized their customers and violated consumer protection laws,” Hatch said in a news release. “We are taking action to a put a stop to their exploitative practices, obtain restitution for the consumers they harmed, and to revoke their licenses so they cannot do this again.”
Among the specific allegations, DCWP highlighted:
1. Using false advertising to lure consumers and charging more than advertised
DCWP alleged both companies used deceptive advertising to lure customers to their dealerships and then illegally sold vehicles at prices well above the advertised prices.
For example, the agency said one consumer saw a 2017 Jeep Grand Cherokee advertised by Brooklyn Mitsubishi on CarGurus.com for $27,994. She visited the dealership and, after taking her down payment, Brooklyn Mitsubishi “rushed her through signing all the paperwork and ultimately charged her $36,585 for the automobile, or $8,500 above the advertised price,” according to DCWP.
The agency said both Brooklyn Mitsubishi dealerships persistently advertised “expired” prices with false claims stating, “the price you see is the price you pay” and “no dealer fees” that weren’t honored when consumers got to the dealership. DCWP added the stores also falsely advertised accessories, warranties and add-on products that did not come with the vehicle.
Meanwhile, DCWP said JF Motors’ dealerships frequently marketed their vehicles as certified pre-owned through the program offered by NIADA, even though JF Motors did not conduct the required 125-point inspection, give buyers the promised 10-year/100,000 warranty, or provide the vehicle history report for each vehicle.
“JF Motors inflated prices by adding fake fees, even charging consumers a fee for the fake NIADA certification,” officials said.
2. Misleading consumers about financing
DCWP said the Brooklyn Mitsubishi dealerships had a practice of “luring” consumers with lower credit scores by promising “guaranteed approval” for financing and pre-approval for financing from a “fake finance company.”
3. Conducting other illegal activity
The agency said the Brooklyn Mitsubishi dealerships misled consumers about warranties, executed illegal contracts, failed to maintain required records, failed to respond to DCWP’s subpoenas and submitted false license applications to DCWP.
Officials added that the JF Motors dealerships used illegal contracts, required consumers to buy service contracts that either did not exist or had less coverage than promised, overcharged out-of-state buyers for title and registration fees and failed to provide contracts and other documents to consumers in Spanish even though the deal was negotiated in Spanish.
NIADA response
After the allegations surfaced, NIADA chief executive officer Bob Voltmann offered this statement on Thursday via a news release.
“The National Independent Automobile Dealers Association does not condone illegal or unethical practices,” Voltmann said. “We continually strive to strengthen the integrity of our industry-leading CPO program through enhanced technology and training.
“The all-new NIADA CPO 3.0 program will guard against fraudulent and deceptive practices through a digital inspection process and will require participating dealers to complete training and acknowledge NIADA’s Code of Ethics,” he continued.
With the reworked program, NIADA and its board of directors said they are helping association members better meet the needs of their customers. The association highlighted that the improvements include a technologically advanced platform that provides consumers multiple layers of protection against fraud.
“The modernized NIADA CPO program uses multi-level vetting to assure car buyers that the vehicles meet certified standards. It includes tighter standards for vehicles to earn the certified designation, while allowing older, higher-mileage units to qualify for limited coverage in the newly created verified pre-owned category,” the association said in the news release.
“The updated program also employs the latest technology to upgrade the vehicle inspection to a tamper-proof 200-point digital process,” NIADA added.
Irate customers
The DCWP news release contained comments from two customers who described their experiences with Brooklyn Mitsubishi.
Jefferey Williams said: “I was looking for a good experience in buying my very first car. Instead, I was taken advantage of and cheated out of my hard-earned money. No one should ever have to go through this with any used car dealership, especially if it’s their first time.”
Karinie Olivero said: “Brooklyn Mitsubishi made it clear that they were not on my side the moment I walked through their doors. There was no explanation of the car-buying process and I didn’t even receive my paperwork on the same day. I felt used, robbed, betrayed and unhappy with how they treated me. It was very troubling as a consumer and as a hard-working New Yorker to go through this kind of treatment.”
DCWP said it currently licenses 476 dealerships and has received more than 10,000 complaints about the industry since 2014.
In that same period, DCWP said it has conducted more than 4,500 inspections of dealerships and issued more than 1,600 violations, most of which were for failure to post required signs, parking or storing cars on sidewalks and public roadways and missing price disclosures.
As a result of mediating complaints, charging businesses with violations of the applicable law and rules, and executing settlements, DCWP said it has secured nearly $3.4 million in consumer restitution and more than $5.5 million in fines against dealerships since 2014.
Nick Zulovich welcomed the most guests ever to appear in a single episode of the Auto Remarketing Podcast to discuss a complicated topic: personal information contained within a vehicle’s infotainment system.
The guests included Matt Arias, associate vice president of operations at America’s Auto Auction, Keely Smith, director of business services at AutoIMS, and Privacy4Cars.com founder Andrea Amico.
To listen to this episode, click on the link available below, or visit the Auto Remarketing Podcast page.
Download and subscribe to the Auto Remarketing Podcast on iTunes or on Google Play.
At Used Car Week 2018 as well as last summer’s gathering of the International Automotive Remarketers Alliance (IARA), Andrea Amico described risk many automotive-industry segments face in connection with Personally Identifiable Information (PII) stored in a vehicle’s technology system.
On Friday, Amico — founder of Privacy4Cars.com — described the headway his firm made in reducing that risk thanks to a newly formed relationship with America’s Auto Auction. The group’s 23 auction locations now will offer a personal information deletion service to vehicle consignors, including OEMs, captives, banks and auto lenders, rental and business fleets and dealers through the use of mobile process available from Privacy4Cars.
“We are excited to partner with such a leader in the auto auction industry as America’s Auto Auction,” Amico said in a news release. “We often see consignors bringing vehicles to auctions that still contain the previous drivers’ personal information stored in their electronic systems (garage door codes, home addresses, phone identifiers, contact lists, call logs, text messages, etc.)
“Now thanks to this relationship, consignors can rely on America’s Auto Auction to dispose of the personal information stored in their vehicles, whether it’s to be compliant with internal record disposal guidelines, to provide peace of mind to their customers, or to meet the requirements of privacy and security of connected devices laws in a growing list of states,” Amico continued.
Launched in the summer of 2018, the Privacy4Cars app can delete personal data retained by modern vehicle infotainment systems quickly and efficiently.
America’s Auto Auction assistant vice president Matt Arias also leads the auction standards committee at both the National Auto Auction Association (NAAA) and IARA. Arias elaborated on how this service can benefit auction group customers.
“It would be a mistake to underestimate how challenging it is to standardize and efficiently perform the clearing of the personal Information,” Arias said. “This is a manual process and there is nothing standard about the vehicles that are consigned.
“We realized we needed a consistent method to efficiently clear all of the information. In short, we needed this tool. Privacy4Cars’ is the best solution,” Arias continued. “Not just because the operators get step-by-step directions on how to clear the systems, but also comes with detailed and on-demand records we can rely on to both provide proof of work to our consignors and operational metrics to efficiently run the process.”
Amico reiterated some of the points he made during Used Car Week and other wholesale industry events to emphasize the importance of Privacy4Cars aligning with America’s Auto Auction.
“We know from multiple studies what data is collected and how often is left behind. We also know may consignors are growingly frustrated by this issue and the associated risks and are looking at auctions to help. We also know that even skilled operators in single-make consignments have a hard time getting the deletion of the Personal Information right, vehicle after vehicle.” Amico said.
“Seeing one of the world’s largest auction chains embracing our patent-pending process is an incredible validation of what we do and the value we bring to the industry,” he went on to say.
Founded in 2005, America’s Auto Auction has 23 locations, including four in Texas, three in Pennsylvania and two apiece in Illinois and Florida.
“This relationship with America’s Auto Auction and Privacy4Cars allows us to serve a growing number of auction guests who are already asking for the service, and sends a simple message to the rest of the industry: if you want to delete consumers’ personal non-public data, we are ready,” Arias said.
What constitutes the U.S. government’s highest safety rating for vehicles is about to be refreshed.
On Wednesday, the Department of Transportation’s National Highway Traffic Safety Administration announced its plan to propose significant updates and upgrades to the New Car Assessment Program (NCPA) in 2020.
“NCAP is celebrating its 40-year anniversary, and we’re proud that it continues to encourage automakers to invest in safety,” NHTSA acting administrator James Owens said in a news release.
“NHTSA’s Government 5-Star Safety Ratings Program has been replicated around the world, and for good reason: Thanks in large measure to NCAP, new vehicles today are safer than ever," Owens continued.
The agency recapped that the NCAP is the government’s premier consumer information program for evaluating vehicle safety performance. The program tests vehicle performance in various crash scenarios and provides an objective rating on a 5-star scale to clearly inform consumers of a vehicle’s safety performance.
“Our program has been a tremendous success and has saved many lives, but far too many American families still lose loved ones every year, and we firmly believe that vehicles can and should be even safer in the future,” Owens said. “That is why NHTSA is working on improving the program to make the 5-Star Safety Ratings Program even more dynamic, and to accelerate NCAP modernization to keep pace with advancements in safety technology.
"American car buyers want safety, and NHTSA wants to help by creating additional market-based incentives for automakers to continue investing in innovative safety technologies that will save lives and prevent injuries,” Owens went on to say.
Drawing, in part, from the comments and feedback received late last year from a public meeting, NHTSA plans to propose major upgrades to NCAP in 2020. The agency indicated these will involve new technologies, new test procedures, updates to vehicle labeling, advancements in crash-test dummies and continued consumer research to ensure NCAP’s products are effectively meeting the public’s needs.
NHTSA added that it will also consider new technologies tied to the safety of pedestrians and other vulnerable road users such as cyclists.
NHTSA is working to publish a Federal Register Notice in 2020 that will seek comment on upgrades to NCAP.
