If operators have been putting off their plans to participate in a BHPH Boot Camp hosted by the National Alliance of Buy-Here, Pay-Here Dealers, they might miss their opportunity completely.
In a message to BHPH Report, NABD indicated its upcoming Boot Camp will be the final one the organization conducts. Limited space for operators still is available for the event that begins on Saturday.
The NABD Boot Camp is a two-day training session where attendees get the chance to see a dealership that’s been in business for more than 20 years in action. NABD co-founder Ingram Walters literally opens the doors to his back-end office where underwriting is completed, his reconditioning center and site of his related finance company for his operation, iCars, which is located just east of Charlotte, N.C.
NABD co-founder and president Ken Shilson also delves into a host of topics important to the success of BHPH dealers, including the establishment and monitoring of an RFC, what static pool analysis can reveal about a portfolio as well as what capital providers might be available.
The boot camp also provides ample time to interact with fellow attendees as well as the chance to sit down and have some one-on-one conversations with both Shilson and Walters.
To get more information, watch the above video, visit www.bhphinfo.com or call (832) 767-4759.
The National Alliance of Buy-Here, Pay-Here Dealers gathered feedback from nine attendees who came to its East Coast Conference last week in Orlando, Fla., that focused on best practices and compliance.
Perhaps one comment from an operator in Indiana summarized what NABD looks to accomplish with this latest event that “featured the greatest collection of legal talent in the 18-year history of NABD,” according to founder and president Ken Shilson.
“I always bring all my location managers with me to NABD conferences. After attending these sessions, they seem to better understand the importance and necessity of what we ask them to do on a daily basis,” said Jim Everett, who runs his BHPH business in Greenwood, Ind.
Attorneys Dave Bafumo, Trish Cacciola, Susan Chylik, Allen Denson, Mark Edelman, Tom Hudson, Eric Johnson, Terry O’Loughlin and Shaun Peterson explained and discussed the current legal and regulatory issues with attendees that impact the BHPH industry today.
“These legal experts really prepared attendees for all the important compliance challenges ahead,” Shilson said.
Attendees who attended the three-day event and completed the compliance sessions will receive a compliance certificate which evidences their participation.
Additionally, Hudson created a 12-step checklist to help attendees down the path to compliance after the conference.
The best operating practices sessions featured a panel presentation by John Neery of CARite, Terry Bowdler and George Klinke of LHPH as well as Hudson.
“These panelists did an outstanding job of explaining the pros and cons of this BHPH alternative business model,” Shilson said.
Other best practices sessions included:
— Web tips to regain market share
— Technology solutions
— A how-to on dealer advertising
— Accounting and tax update
— Tax refund tips
— An Autotrader presentation on its BHPH Finance Center
— Capital market alternative discussion groups
— Sourcing, financing and reconditioning inventory techniques
— A benchmarks/trends update
— Phone skill tips
— A current industry issues discussion
— A panel covering how regulatory issues may change BHPH
— An underwriting best practices panel.
“Attendee evaluations unanimously indicated that the conference sessions successfully met all their learning objectives,” Shilson said.
Emily Feathers of Powell, Wyo., supported Shilson's claim by saying, “I came to get a general education on current and relevant topics and thought the conference was very informative. All the speakers did a great job.”
Nick Hall from Lorain, Ohio, noted, “On compliance, the complaint issue was emphasized and it brought awareness to the importance of handling complaints efficiently and timely.”
Dave Rooker, also from Lorain, Ohio, added “I thought that there was really good coverage of many topics that I previously did not know much about.”
A sold out exhibit hall featured more than 60 exhibitors and sponsors who offered all the latest products and services to make attendees more efficient and profitable in the future. The exhibit hall included two receptions, coffees, and a breakfast that enabled attendees to network with industry experts, sponsors and others.
NABD announced that it will hold a Buy Here Pay Here Boot Camp on Jan. 9 and Jan. 10 at the iCars BHPH dealership owned by Ingram Walters in Charlotte, N.C., where attendees can “see and learn” through hands-on training. Shilson said space is limited, so operators are encouraged to call NABD headquarters at (832) 767-4759 while space remains available.
Special discounts to the Boot Camp are available for operators who attended the East Coast Conference.
NABD will also hold its 18th annual National Buy-Here, Pay-Here Conference at Wynn Hotel and Casino in Las Vegas on May 24-26.
For more information on these events, or to download conference presentations, visit www.bhphinfo.com.
Finance And Insurance Resources (FAIR) has partnered with KISS Concepts Group to release the Complete Asset Protection (CAP) program — what they believe is a first-of-its-kind, all-inclusive insurance program to protect the collateral of buy-here, pay-here dealers, lease-here, pay-here dealers, auto finance companies, banks, credit unions and related finance and lease companies.
The CAP program is one of several unique insurance offerings to be released this year, resulting from a strategic master agent private label agreement between FAIR and KISS Concepts Group. The two companies are building a platform of insurance programs tailored specifically for auto-related audiences.
“One of the biggest challenges every auto finance company faces is finding affordable, easy-to-implement ways to minimize their normal everyday losses, catastrophic losses and other unique risk exposures that occur in protecting their collateral and profit. The CAP program offers exactly that,” FAIR chief executive officer Rick Mims said.
“For even more peace of mind, the entire policy is backed by Certain Underwriters at Lloyd’s of London, one of the largest specialty insurance providers in the world with underwriting capacity in excess of $31 billion,” Mims conintue.
CAP includes the following coverage for both loans and leases, combined into one policy:
— Guaranteed asset protection (GAP): This coverage can protect both lenders and borrowers, so it can be presented during the sales process as a value-add to the vehicle buyer.
— Lender’s single interest: If the consumer stops making payments, the lender’s investment can be covered against many perils without the cost of having to track insurance.
—Skip: If the lender cannot locate the borrower, co-borrower or the vehicle, the lender’s investment can be covered.
—Physical damage and theft: If the vehicle is damaged or stolen before, during or after repossession (and the consumer’s insurance has lapsed), the lender’s investment can be covered.
—Title errors and omissions: If the insured party or the state makes an error or omission in the processing of the loan or title work that causes a loss, the insured party can be covered.
—Confiscation and seizure: If the vehicle is impounded or seized by police or a public/government/federal office or officer, the lender’s investment can be covered.
—Terrorism: If the vehicle is damaged during an act of terrorism, the lender’s investment can be covered.
—24-hour roadside assistance: This coverage can benefit both the borrower and lender and includes sign-and-drive coverage for items such as towing assistance, flat tire assistance, emergency fluid delivery, lockout assistance, battery service, rental car discounts and more.
Rod Heasley, president and chief relationships officer of KISS (Keep It Simple Successfully) Concepts Group partnered with FAIR to develop the CAP program. Heasley explained the policy offers dealers and lenders a “one-stop shop” to insure their collateral investment.
“Clients now have the convenience of combining multiple insurance coverages into a single policy. That means only one claim form and one point of contact,” he said.
“In addition to expanding coverage, CAP streamlines the dreaded ‘paperwork overload’ from dealing with multiple insurance agencies, thus adhering to our philosophy of keeping it simple,” Heasley went on to say.
CAP policies may be applied to new and/or existing loan portfolios. Coverages within the policy may be customized, mixed and matched depending on the insured party’s needs and preference.
For more information, contact KISS Concepts Group at (844) 857-0869.
Ken Shilson is giving operators an offer perhaps most of their customers might want — a money-back guarantee.
To reinforce what the National Alliance of Buy-Here, Pay-Here Dealers is orchestrating for its upcoming East Coast Conference, Shilson indicated this week that dealer attendees will be able to gather these seven elements to help their business or the NABD founder and president will give them a refund.
Shilson highlighted BHPH operators who come to the event set for Nov. 3-5 in Orlando, Fla., will receive a 12-step roadmap to cost-effective BHPH compliance; a strategy that operators can take back to their stores and implement now.
Furthermore, Shilson pointed out attendees will gather best operating practice tips to compete more successfully in 2016, including:
— Underwriting recommendations that will help “keep them sold”
— Marketing strategies to gain lost market share
— New inventory sourcing and reconditioning tools and techniques for the selling season
— Personal networking opportunities with leading capital providers
— New technology products and services in a sold-out exhibit hall
— Industry benchmarks and other BHPH trends
“Both the workshops and the general sessions feature new content never presented before, and important information that will help attendees succeed,” Shilson said.
The NABD East Coast Conference is scheduled for Nov. 3-5 at the Wyndham Orlando Resort International Drive in Orlando, Fla.
The conference ends at 1 p.m. on Nov. 5 to facilitate travel.
NABD highlighted the Wyndham Orlando Resort International Drive is newly renovated and located next to the hottest new attraction, the Orlando Eye. Shuttle service is available to Disney properties and Universal Studios.
NABD has arranged discounted room rates of only $149 per night with no resort fees, but the special offer expires this week. Attendees can go online to make reservations or by calling (800) 421-8001 and referencing code NABD.
The complete agenda and speaker information is posted and will be continually updated on the NABD website at www.bhphinfo.com. Registrations can be made at the website or by calling (832) 767-4759.
“Don’t miss this conference is you want to be more successful in 2016,” said Shilson, who discussed more highlights about the upcoming conference in the video at the top of this page.
The National Alliance of Buy-Here, Pay-Here Dealers is bringing together seven of the most experienced, knowledgeable legal experts who have several decades of collective experience in the auto regulatory world for the 12th annual NABD East Coast Conference.
The conference theme is “More Success, Less Risk,” and the event is designed for both new and experienced operators. Organizers insisted BHPH dealerships of all sizes will benefit from the conference’s compliance track dubbed Compliance University from the knowledge to be shared by:
— Tom Hudson of Hudson Cook
— Gerald Sachs of Paul Hastings
— Terry O’Loughlin of Reynolds and Reynolds
— David Bafumo of FNI Inc.
— Mark Edelman of McGlinchey Stafford
— Allen Denson of Hudson Cook
— Trisha Cacciola of Hudson Cook
And more legal experts are expected to join other conference panels, too.
”This is the only compliance training designed specifically for BHPH operators. This is the greatest assembly of legal talent at one NABD event that we have ever assembled,” NABD president and founder Ken Shilson said.
NABD East Coast Conference is scheduled for Nov. 3-5 at the Wyndham Orlando Resort International Drive in Orlando, Fla.
Beyond the segment labeled Compliance University, the conference features dual-track workshop sessions starting at 3 p.m. ET on Nov. 3, covering BHPH best operating practices and compliance. The program features many of the nation’s leading attorneys, experts and successful operators who will share their latest tips and insights that bring success in the highly competitive subprime auto finance market of today.
The conference also will open with a first-time attendee reception.
“The compliance workshops will also include affordable compliance solutions which will help operators avoid legal and regulatory mistakes that can cost millions of dollars,” said Shilson, who added that upon completion, all attendees will receive a compliance certificate that proves their participation.
The Best Operating Track includes sessions on:
— Website design and content
— Technology solutions
— Payment devices
— Marketing strategies to gain market share
— Inventory sourcing and reconditioning
— Capital
Shilson highlighted these sessions feature leading experts and operators who will share ideas that succeed in the current environment.
“The workshops will not be infomercials and will benefit both owners and all key employees,” he said.
During the second half of the conference, the dual tracks will combine into the general sessions covering:
— Lease-here, pay-here program
— Using new technology to finance and source inventory
— Collections
— Repossessions
— Payment device best practices
— New benchmarks and trends update
— Accounting /tax tips and update
— Regulatory developments forecast
— Underwriting tips
— Top take-away session
“Both the workshops and the general sessions feature new content never presented before, and important information that will help attendees succeed,” Shilson said.
The conference ends at 1 p.m. on Nov. 5 to facilitate travel.
The exhibit hall will include all the latest products and services that increase BHPH profits and cash flow. Two receptions, a breakfast and a luncheon are included that are designed to allow attendees to network with other operators, experts and exhibitors.
NABD highlighted the Wyndham Orlando Resort International Drive is newly renovated and located next to the hottest new attraction, the Orlando Eye. Shuttle service is available to Disney properties and Universal Studios. NABD has arranged discounted room rates of only $149 per night with no resort fees.
“Attendees are encouraged to bring their families to enjoy the nation’s most popular family destination — Orlando,” Shilson said.
“Successful BHPH operators today must understand and adapt to the changing market environment. The old ways aren’t working anymore,” he continued. “This conference will definitely help attendees compete more successfully while avoiding the new regulatory pitfalls. The Orlando destination is an attractive and affordable venue.”
The complete agenda and speaker information is posted and will be continually updated on the NABD website at www.bhphinfo.com. Registrations can be made at the website or by calling (832) 767-4759.
Space and room availability is limited and early registration discounts are expiring soon. Space and room availability is limited and early registration discounts are expiring soon.
Exhibitors can call Keith Shilson at (832) 767-4759 to learn more about space still available.
GPS tracking solutions provider Skypatrol released what it’s calling a time-saving solution for batch communications to customers in your related finance company portfolio who are behind on making their installment payments.
Skypatrol highlighted its AutoBatch for DMS can give buy-here, pay-here dealers and vehicle finance companies the capability to automate DMS-driven “machine to machine” (M2M) commands to contract holders in default. Now, operators can leverage the power of their existing DMS to output a list of defaulting customers and the type of action that is required.
This list is automatically emailed M2M, and Skypatrol’s secure servers communicate with the borrower’s GPS turning on a piezo, sending location information or deactivating the vehicle if parked.
Officials explained this process is completed fully independent of any system integration or application program interface (API) exchange, making it easy for Skypatrol customers to implement the solution across all popular DMS platforms without specialized technical support.
Each time commands are distributed, a detailed report is sent confirming the action took place. If for some reason the vehicle can’t be reached, the system automatically retries to establish contact — which is reported as well.
Depending on how much of your portfolio is in some level of default, Skypatrol insisted it’s vital that BHPH dealers and finance companies have an efficient methodology for asset protection.
Skypatrol’s product and service solution combines proprietary GPS devices with innovative software systems that can help boost portfolio performance, increase operational efficiencies and reduce risk in the vehicle finance industry.
The AutoBatch for DMS system can combine with Skypatrol’s other finance industry products for a complete end-to-end solution. Its one-click Repo Mode Tool can gives time-limited secure smartphone access to recovery teams of a vehicle’s current location.
“Auto Batch for DMS will save lenders and dealers the manual and labor intensive task of individually creating actions one at a time when no integration is possible,” Skypatrol chief operating officer Larry Jones said.
“There are some DMS systems that don’t allow integration due to the lack of an API, there is a deficient API or it is a legacy system,” Jones continued. “Either way, finding a way to work outside of an API is just what our customers need to remain efficient and competitive.”
Furthermore, Jones mentioned Skypatrol's Data Verification Tool can qualify applicants and help locate them if they skip. Its Virtual Collector module can send automated email and text reminders, increasing cash flow and reducing defaults.
“I am a very strong proponent of products that automate communications and actions around the default process,” said Jim Rhoads, a consultant to the BHPH industry.
“By removing the potential for human error, reaction to delinquency is timely and consistent,” Rhoads continued. “It also depersonalizes part of the process, allowing collectors to effectively blame ‘the system’ for early and persistent reminders.
“Automated communication also reduces the level of frustration that builds in collectors when they are unable to reach the debtor/customer and it frees collectors up to do the more important work of solving problems,” Rhoads went on to say.
New Jersey and New York legislators currently are crafting measures that would prohibit the installation of payment assurance devices, including GPS and starter-interrupt units, as a condition of securing vehicle financing. And advocates for the buy-here, pay-here industry are working not only to make sure the current legislation doesn’t become law in the Garden State or Empire State, but also so it doesn’t become the blueprints for other states to adopt.
Assemblyman Paul Moriarty, who represents New Jersey’s District 4 that includes the cities of Camden and Gloucester, is the sponsor of AB 4033, which passed unanimously out of the chamber’s consumer affairs committee last month. Industry sources told BHPH Report that a floor vote on this bill hasn’t been scheduled yet as amendments are being crafted possibly to modify the strict prohibition of the devices so commonly used by BHPH dealers and finance companies that cater to deep subprime consumers.
“We are very aware of what the state of New Jersey is doing. This is a big concern for us,” said Shaun Petersen, who serves as general counsel for the National Independent Automobile Dealers Association.
Soon after the New Jersey legislative committee passed the bill onto the Assembly floor agenda by a 4-0 vote on Jan. 12, members of the Payment Assurance Technology Association (PATA) met with Moriarty and other lawmakers in attempt to share what prohibiting these devices would do to the industry.
Corinne Kirkendall is vice president of compliance and public relations at PassTime as well as a member of PATA’s leadership group. Kirkendall was part of the gathering with Moriarty, who she described as a consumer advocate who questions the entire methodology of subprime auto financing.
Kirkendall recapped that PATA is looking to overcome what she called misconceptions perpetuated last summer when the New York Times published reports about starter-interrupt devices disabling vehicles while they were in motion on a busy freeway. She mentioned that Moriarty might be in favor of modifying AB 4033 as it’s currently written if interest rate caps are instituted on vehicles that have the devices installed.
“We’re working with him to craft legislation we can all agree on,” Kirkendall said.
Meanwhile, New Jersey’s Senate also has a measure that hasn’t progressed as far as the Assembly legislation but contains language that might make BHPH operators cringe. Sen. Nilsa Cruz-Perez, who represents District 5 that also covers Camden and Gloucester, introduced SB 2705 on Jan. 15, and the bill was referred to the chamber’s commerce committee.
The current measure Cruz-Perez sponsored contains a punishment component should the measure become law. BHPH dealers and finance companies would be fined $10,000 for a first offense and not more than $20,000 for any subsequent offense should GPS and starter-interrupt devices be prohibited as a part of finalizing a vehicle installment contract.
SB 2705 also states that potential violations can result in cease and desist orders issued by the New Jersey attorney general, the assessment of punitive damages, and the awarding of treble damages and costs to the injured party.
According to SB 2705 as currently written, “As the subprime auto lending market has expanded greatly in recent years, these devices are increasingly installed on motor vehicles as a condition of securing a loan. Use of the devices is generally unregulated and allows predatory lenders to track and store data concerning the movements of a vehicle without any safeguards for the privacy of its owner or operator, and in the case of devices with starter interrupt capability, allows the remote disabling of motor vehicles without warning, causing potential public safety issues and other serious consequences.
“Accordingly, this bill protects the safety and privacy of consumers by prohibiting the installation of a payment assurance device in connection with a financing or lease agreement,” the proposal continued.
With both measures being introduced in the span of less than two months, Petersen said, “Speaking on behalf of NIADA, I think it was kind of an out-of-left-field thing. It certainly wasn’t something that over the last year or some that was significantly discussed. It’s something we’re adamantly opposed to, and we’ll communicate that concern and displeasure with anybody and everybody that will listen.”
And Experian Automotive data shed light on just how much this legislation could impact the industry in New Jersey.
According to Experian information shared exclusively with BHPH Report, there were 10,889 vehicle installment contracts booked with BHPH operators between January and November of last year. And 28.17 percent of that origination figure generated by BHPH dealers in the Garden State was connected to consumers with credit scores between 350 and 500.
The average credit score for BHPH originations in New Jersey during the first 11 months of last year came in at 538, Experian said.
Experian’s data associated with finance companies — institutions that do not hold consumer deposits but oftentimes finance subprime customers — portrayed similar trends.
The average credit scores for finance company originations in New Jersey during the first 11 months of last year was just 575. The origination total for that span came in at 30,972 contracts.
More Action Beyond New Jersey
As dramatic of an impact the legislation could leave in the Garden State, Kirkendall mentioned state legislators in Virginia, New York, Pennsylvania and Rhode Island currently are or have been considering device prohibition legislation.
While PATA lobbying efforts led Virginia lawmakers to scratch a potential measure, New York legislators in both the Assembly and Senate are crafting similar legislation to what’s on New Jersey’s docket. SB 1547 and AB 3463 were introduced on Jan. 13 and sent to each chamber’s consumer protection committee. Like his nearby neighbor, the sponsor, Sen. Timothy Kennedy, is seeking to prohibit the use of starter interrupt and GPS devices as a condition of vehicle financing. Kennedy represents the 63rd district, which includes a good portion of Buffalo, N.Y.
In writing his justification for this legislation, Kennedy said, “A recent explosion in the subprime auto lending market has some of the same banks and financial institutions responsible for the catastrophic collapse of the mortgage industry in 2008, and consequently, the U.S. and global economies, cashing in big once again. And while these high risk, high-interest loans are on automobiles and not homes, unfortunately, the victims are often low-income consumers still trying to recover from the recent economic recession.
“A growing number of these predatory lenders are now equipping cars with a starter interrupt device as a condition of the loan. This new technology allows lenders to remotely disable the ignition in order to prevent a car from starting within minutes of a payment being late. This reckless practice can threaten public safety and result in serious consequences. Instances of parents being unable to rush seriously ill children to the hospital due to lenders activating the devices are becoming increasingly more common,” Kennedy continued.
Additionally, many of these devices have GPS technology which allow the lenders to track the cars' location and movements with very few regulations to protect individual privacy and public safety. This legislation specifically bans the practice of installing a starter interrupt device as a condition for new or used car purchases, to remedy this gap in the law and further protect consumers,” he went on to say.
In his bill justification, Kennedy also referenced the New York Times’ account of how these devices operate that PassTime fervently refuted last summer. As a result, PATA is meeting with Empire State lawmakers next Monday.
“We’re going to talk through what the devices do through an educational session and provide them with some uniform grass-roots legislation to see if that is of interest to them,” Kirkendall said.
“There is so much inaccurate information in that (New York Times) article. It’s been a good way for the industry to come together and fight this legislation as we’re doing some justice for not only the vendors, but also the dealers and lenders who use the devices,” she continued.
“It’s about continuing to educate and make sure everyone understands what we’re doing and why we’re doing it,” Kirkendall went on to say. “We’re not going to win every one but we’re going to win a lot of battles because we’re doing things the best way we can and we’re not hurting consumers. That’s the true benefit. We’re not trying to hurt consumers. We’re trying to help them.”
Kirkendall added the measures in Pennsylvania and Rhode Island would have to be reintroduced during the current legislative sessions since they didn’t make it out of committee during the last time state lawmakers gathered.
What BHPH Dealers Elsewhere Can Do
Hudson Cook partner Nikki Munro also was part PATA contingent who met with New Jersey legislators. Munro also will be a part of the upcoming gathering in New York. She cautioned BHPH dealers who might not have operations in New Jersey or New York not to brush aside what’s going on in those locations.
“In New Jersey and possibly beyond, we’re not going to get a prohibition but possibly some legislation that allows for the appropriate and responsible use of the devices for collection purposes. Perhaps the legislation will classify the disclosure required and other points like it is required in California,” Munro said.
“Keep an eye what’s going on during your legislative session and be prepared to educate legislators and/or consumer advocates in your area about the responsible use of these devices,” she continued.
And Munro urged BHPH dealers to utilize what she described as the best practices for leveraging the capabilities of GPS and starter-interrupt devices such as disclosures that state details about the use of the device as a means of collection and repossession and how the vehicles can be restarted in an emergency situation.
“I think we have a reaction from legislators who don’t have the full picture of how these devices work and the majority of the dealers who are using them responsibly,” Munro said.
Mike Marak is the president of M&M Auto Sales in Hiawatha, Iowa, boasting more than three decades of buy-here, pay-here experience.
Marak chose to spend three days in Dallas last week for the Best Practices Conference hosted by the National Alliance of Buy-Here, Pay-Here Dealers. Judging by what he shared with NABD afterward, it seems to have been time and money well spent.
“Everything was great,” Marak said. “I did not hear one bad speaker. I learned something in every session, and I have been in the business 31 years.”
NABD highlighted that BHPH operators from throughout United States attended the three-day event, which wrapped up on Jan. 20. The dual-track program focused on best operating practices and compliance for BHPH.
And Marak wasn’t the only dealer who thought spending time away from the store to come and gather information on compliance, collections and underwriting was a prudent move.
“NABD is the leading voice and authority in our industry. There is no close second,” said Al Gardiner, owner of St. Mary’s Motors in Lexington Park, Md. “This show and other NABD contributions are an absolute must for dealers whose livelihood depends on the BHPH industry.”
Jack Bridges, chief operating officer of Credit Now Auto Co. and Atlantic Acceptance Corp., offered a similar assessment.
“Having attended virtually every one of (NABD’s) national conferences over the years, I came expecting to gather a wealth of information and that is exactly what the show delivered and so much more that it’s simply amazing,” Bridges said.
“(NABD’s) conferences are, simply stated, a must for anyone that is serious about learning, improving and growing their BHPH business,” he continued. “In fact, I would say a lot of Credit Now Auto Company’s success over these many years is due in a large part to what we have learned at (NABD's) shows, then brought home and put into practice.”
NABD founder and president Ken Shilson indicated the educational sessions featured 11 dual-track workshops on Sunday afternoon and Monday.
Compliance topics included legal and regulatory updates, handling regulatory investigations, compliance systems and an IRS update. The best operating practices sessions focused on areas such as the Internet, integrated technology solutions, add-ons, maximizing recoveries, performance benchmarks, inventory and reconditioning and capital alternatives.
On Tuesday morning, the workshop sessions combined into a single track, featuring both best operating and best collections panels and a presentation on the new AutoTrader.com Buy-Here, Pay-Here Center.
The best practices sessions featured many of the nation’s most successful operators and industry experts. The compliance program included leading attorneys Tom Hudson, Terry O’Loughlin, Patty Covington, Eric Johnson, David Silverman, Myles Stevenson, Gerald Sachs and other chief compliance officers.
“All the sessions were interactive so attendees could ask questions and get answers to their questions on how to become compliant, and ways to improve their profitability and cash flow, and regain market share,” Shilson said.
“These sessions helped attendees take a proactive approach toward making 2015 a better year,” he continued. “In the highly competitive environment of today, training like this has never been more important. Attendees left with many new ways to increase market share and to avoid legal and regulatory mistakes that could cost them millions.”
Joyce Caudill, vice president of Richwood Acceptance in Walton, Ky., insisted that Shilson and NABD “have their fingers on the pulse of the BHPH industry.”
Caudill emphasized how discussions about the Consumer Financial Protection Bureau taking a great interest in the BHPH space are some of the main takeaways she had from the event.
“As our industry continues to come under close scrutiny and tighter regulation, real-time information on what the CFPB and other regulators are doing, planning on doing and honing in on, is more important than ever,” Caudill said. “The legal experts on the panel were top notch, not afraid to answer the hard questions and get us all on the right path to compliance.
“The technology experts have listened and are treated our business as the real player it is for even more credit challenged customers than ever,” she continued. “Putting all the information in a friendly, exciting format, at one place makes dealer education easier than ever. I tell everyone I know in the business that these conferences are a ‘must do,’ except our competition.”
And dealers weren’t the only attendees who gained valuable experiences out of NABD’s latest event offering. Mike Downey is the vice president of sales and marketing at Auto Master Systems.
“It is obvious that NABD has a great understanding of the needs of today’s dealers by dedicating a conference to the important topics surrounding operation and compliance,” Downey said. “The quality of content offered, and their selection of highly qualified speakers makes attending this conference an easy decision for BHPH operators who want to improve their business.
“We’re proud to be a part of it and look forward to the next one,” Downey went on to say.
And Tax Refund Services and TaxMax founder Bill Neylan added, “The NABD show is a must for all buy-here, pay-here dealers, as well as any vendor in the industry who are looking to better their business.”
NABD announced it will hold its 17th annual National Conference on May 19 through May 21 at the Wynn Hotel Resort and Casino in Las Vegas.
“The Wynn is the finest, five-star, Las Vegas hotel and casino. NABD offers unprecedented room discounts with no resort fees while supplies last,” Shilson said.
In addition, NABD plans to hold a BHPH Boot Camp on Aug. 22 and 23 in Monroe, N.C.
For more information on these upcoming events, visit www.bhphinfo.com or call (832) 767-4759.
Congress empowered the Consumer Financial Protection Bureau to supervise buy-here, pay-here dealers when it passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. Since its inception, the CFPB has not specifically targeted a BHPH dealer — until now, that is.
In November, the CFPB announced a consent order against DriveTime Automotive Group, one of the largest BHPH dealerships in the country, for allegedly harassing consumers with debt collection calls and providing inaccurate credit information to credit reporting agencies. As part of the consent order, DriveTime agreed to pay an $8 million civil money penalty, end the debt collection tactics categorized by the CFPB as unfair, fix its credit reporting practices and arrange for affected consumers to obtain free credit reports.
According to the CFPB, at least 45 percent of DriveTime’s auto installment contracts were delinquent at any given time. When DriveTime consumers fell behind on their installment payments, at least one of DriveTime’s 290 collection employees in two domestic call centers and 80 contractors in Barbados would call them.
Indeed, these employees and contractors placed tens of thousands of collection calls each weekday. At the end of 2013, DriveTime had approximately 69,000 installment contracts that were past due and that these employees or contractors would have been attempting to collect.
Dodd-Frank establishes that companies’ practices can be unfair if consumers cannot reasonably avoid being harmed. The CFPB determined that several of DriveTime’s debt collection practices were unfair to consumers.
Abusive Calling Practices
For example, DriveTime often called borrowers at work, a practice DriveTime management encouraged. Several consumers requested that DriveTime not call them at work, but DriveTime called anyway. One consumer was unfairly called 30 times at work after her do-not-call request.
DriveTime also required consumers to provide the names and phone numbers of at least four references when they applied for financing, a common practice in subprime credit. When consumers fell behind on their payments, Drive- Time called these references.
Many borrowers and references requested that DriveTime no longer make these calls, but DriveTime continued to call. Some references complained that DriveTime called them for months aft er they asked the company to stop.
Finally, DriveTime frequently used third-party databases to find new phone numbers for consumers who fell behind in their payments, a practice known as skip-tracing. Unfortunately, these databases were often wrong.
Upon receiving DriveTime’s calls, many third parties told DriveTime employees or contractors that they had the wrong number and requested that DriveTime stop calling them. Despite such requests, DriveTime continued to call.
In some cases, DriveTime called these wrong numbers for more than a year before stopping.
More Wrongdoing
Unfortunately, DriveTime’s alleged unfair acts did not stop at collection practices. It also allegedly erred in how it reported delinquent information to consumer reporting agencies.
In a number of cases, DriveTime reported inaccurate timing of repossessions and dates of first delinquency. This made it appear on consumers’ credit reports that DriveTime repossessed consumers’ vehicles more recently than the actual date of repossession.
DriveTime also mishandled consumers’ complaints about this inaccurate information. In several instances, consumers disputed the same account information several times without correction.
In other cases, DriveTime falsely told the consumers in writing that it corrected the information. The CFPB specifically found that DriveTime failed to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the information it furnished to credit reporting agencies.
Ending Result
To settle a potential enforcement action with the CFPB, DriveTime agreed to stop communicating with consumers at their workplaces if consumers have requested that DriveTime not call them there, or if DriveTime otherwise knows that the consumers’ employers prohibit communications to their workplaces.
Additionally, DriveTime cannot call a particular phone number related to an account if any person requested that DriveTime stop calling that number.
DriveTime also agreed to provide a clear and conspicuous notice to existing customers as to how they can limit the times of day that Drive- Time will call them.
For all new customers, DriveTime will provide this notice as part of a written welcome kit. Drive- Time will also provide this notice on the welcome call and, if applicable, at the time of the first collection call on the account.
In addition to agreeing to report only accurate information, DriveTime agreed that if it furnished inaccurate information to a credit reporting agency, it will provide corrected information to the agency or request that the agency delete the wrong information from the consumer’s file.
For consumers about whom DriveTime furnished inaccurate credit information, DriveTime agreed to give them a notice that explains how to obtain a free credit report from each of the nationwide consumer reporting agencies.
Finally, DriveTime agreed to implement a process for auditing information it furnishes to the credit reporting agencies on a monthly basis and monitoring the disputes it receives.
Industry Ramifications
So, if you operate a BHPH dealership, what are your lessons from this consent order?
First, be very careful in how you collect on accounts. If a consumer tells you to stop calling, then stop calling. If you obtain references and a reference asks you to stop calling, stop immediately.
Keep track of these requests in your servicing software and collection call notes. Ensure that your policies and procedures are current.
If you don’t have a compliance management system in place, budget for one in 2015, in a manner that corresponds to the size of your operations.
And finally, if you do report information to the credit bureaus, ensure that the information is accurate.
Catherine Brennan is a partner in the Maryland office of Hudson Cook and can be reached at (410) 865-5405 or by email at cbrennan@hudco.com.
Buy-here, pay-here operators interested in utilizing the capabilities of license plate recognition technology to mitigate losses now have another opportunity if they use the solution offered by AutoSoft NET.
On Wednesday morning, Digital Recognition Network (DRN) and AutoSoft NET announced that AutoSoft NET will be embedding DRN’s LPR data into its BHPH software, RV dealer sales software platform and finance company management system.
Officials explained the new, unique data will allow AutoSoft NET customers to identify collections issues earlier in the workflow, reduce time to payments and improve customer contact.
“At AutoSoft NET we deliver solutions that help dealerships become more competitive and profitable. By adding DRN’s vehicle location data to our AutoDealer products we offer our customers the most competitive and unique vehicle location data on the market,” AutoSoft NET vice president of business development Carlos Lopez said.
“AutoDealer with DRN ‘inside’ becomes the most reliable dealer management solution available,” Lopez added.
DRN’s vehicle location data is comprised of license plate data that is gathered throughout the U.S. BHPH dealers can purchase DRN’s vehicle location data as an embedded solution within AutoSoft NET’s AutoDealer Plus and AutoDealer Light platforms.
DRN vice president of product management Richard Rodenbusch pointed out that BHPH operators already using DRN’s vehicle location data report improved collections, reduced days to repossession, reduced fraud and improved customer contact rates.
“DRN has proven solid results for the Top 100 auto lenders, embedding our vehicle location data into the AutoSoft NET platform enables AutoSoft NET to better serve buy-here, pay-here dealers by providing a unique data source to enhance customer contact without the use of traditional GPS cameras,” Rodenbusch said.
More details can be found at either www.DRNData.com or www.AutoSoftNET.com.
