The managers of AutoTrader.com’s new Buy-Here, Pay-Here Center aren’t trying to add more noise to the compliance discussion, but rather are bringing on board a legal expert who is being charged with explaining issues in a concise manner for dealers who are using this BHPH marketing tool.

Dealers who sign up or already are part of the Buy-Here, Pay-Here Center will now see compliance commentaries from David Silverman, who operates his own firm in Englewood, Colo.

An attorney since 1982, Silverman served two terms on the board of directors for the National Association of Retail Collection Attorneys (NARCA), the premiere trade association for Creditor Rights Counsel. He has been published in the Washington Journal and the Commercial Law Bulletin, has been a contributing author to the original publication of State FDCPA Laws and how they now apply to creditors, as well as being a convention chair and speaker at NARCAs conferences.

Silverman also has served as Judge Pro Tem in municipal and small claims court.

“We want to provide dealers with the tools to be compliant,” said Brett Kelly, the director of independent dealer business at AutoTrader.Com. “It’s one thing to say that. It’s another thing to actually help dealers do it.

“For example, if a dealer mentions a down payment, which we encourage them to do, we also have it set up so they can put in a payment and a disclaimer,” Kelly continued. “It’s one thing to say they need to put in a disclaimer. It’s another thing for them to be able to understand what makes a good disclaimer.

“Hopefully with this new series that we’re putting into our back end, that might at least get the ball rolling in helping them to better understand what makes up a good disclaimer and what really is transparent,” he went on to say.

Kelly and Silverman explained this compliance commentary idea first germinated when they crossed paths at the National Independent Automobile Dealers Association Convention this past summer. After a couple of conversations, they decided to push forward with this offering from the Buy-Here, Pay-Here Center, which remains free for BHPH operators to use through May of next year.

“I’ve been going to these conferences for several years,” Silverman said. “Coming from the consumer collection industry, it was really amazing to sit around and listen to everyone at the auto dealership conferences talking about compliance. Almost three years ago people were talking about that there’s the Dodd-Frank act and this thing called the CFPB.

“I was really living the future from what everyone at the auto conferences was speculating about,” he continued. “I really know what was coming down the pike now and what’s coming next year not because I’m a soothsayer, but because I’ve been living it. And it’s awful. I know how serious these guys are. I know what it’s like being down at the bottom of the totem pole as a recipient of all of these regulations.” 

Silverman plans to send something to AutoTrader.Com for the Buy-Here, Pay-Here Center at least once per month to keep BHPH dealers as informed.

“The goal is to give dealers an easy line to call for help. They can always call, and we can talk about whatever their particular issue is,” Silverman added.

Both Kelly and Silverman emphasized that the goal of this project is to keep BHPH operators updated so they’re not caught flatfooted if they receive a civil investigative demand or some other alert from a regulator.

“When you say education, you hit the nail on the head. That’s a subject that’s very near and dear to my heart,” Silverman said.

“I think the answer to all of our problems is just good education. More problems are going to result from poor or no education. It’s the way to go,” he continued.

“I think the buy-here, pay-here space is going to be in for some serious surprises, not to mention the rest of the auto world, on the collections side because especially in the advent of UDAAP and the redefinition of UDAAP by the CFPB all of the auto finance companies that are doing internal collection work, are now going to subject to all of the FDCPA laws,” Silverman went on to say.

Silverman further explained what he meant by that statement about the Fair Debt Collection Practices Act (FDCPA) and how the Consumer Financial Protection Bureau interprets the Unfair, Deceptive Abusive Acts or Practices (UDAAP).

“If I loan you money, I can call and my collection efforts are not subject to the FDCPA. Now under UDAAP, that’s no longer true,” Silverman said. “There’s a whole body of case law and all of the districts in the United States many of which interpret that law differently that are going to be at disposal of (CFPB director Richard Cordray) to hammer on all of the collection activities of the buy-here, pay-here dealers and the even the finance companies that have their own collection departments and programs.”