Agora Data and Ignite Consulting Partners took another step together in their working relationship on Monday to help buy-here, pay-here dealers and other operations that specialize in subprime auto financing.
The companies have entered into an agreement whereby Ignite will provide compliance services in support of AGORA’s Certified Member initiative. The companies highlighted the AgoraCertified program can enable BHPH dealers to create a more valuable portfolio by providing the tools and expertise to help “recondition their loans.” AgoraCertified works closely with dealers and their data, assisting them with valuations, the accuracy of data and best practices regarding loan files.
“Just as it does with your auto inventory, reconditioning your auto loans can significantly increase the value of your entire portfolio,” Agora senior vice president of sales Chris Barry said in a news release. “This service is provided free of charge to Agora members, and Agora does all the work.”
“Our program allows dealers to have their accounts examined to identify patterns and practices that may be holding back portfolio value,” Barry continued. “Sometimes that involves resolving compliance issues, so we’ve asked Ignite to work with us and our dealers in support of our program.”
This week’s move arrives after Agora and Ignite first collaborated last March on a compliance program to help BHPH dealers and bulk paper sellers.
“We are excited to have the opportunity to bring our compliance acumen to Agora’s national dealer network,” Ignite chief legal and compliance officer Steve Levine said, “Agora’s program is one of a kind and gives dealers access to opportunities they’ve never had before, and we are honored to be asked to play a role.”
For more information, contact Agora Data at (877) 592-4672, or email contactus@agoradata.com.
Ignite Consulting Partners reinforced its roster of experts to help auto finance companies and buy-here, pay-here dealerships.
The compliance firm recently announced the addition of Clint Rutherford, who has a background both in operations and compliance.
Ignite Consulting Partners highlighted that Rutherford has managed diverse teams across various servicing functions including collections, customer service, bankruptcy, insurance, title administration and dispute resolutions while often serving as the lead liaison for regulator examinations.
Rutherford is also a graduate of the SCCE’s CCEP program and the National Automotive Finance Association’s highly specialized consumer credit certification. He has helped companies build and improve on their credit reporting processes, consumer complaint handling policies and provided pivotal guidance on the development of internal compliance management systems (CMS).
“We are thrilled to add Clint’s impressive skills to Ignite,” said Steve Levine, Ignite’s chief legal and compliance officer. “He has a rare combination of compliance, operational and IT expertise that will be of great benefit to our clients.
“We often find ourselves tasked with implementing process improvement and training in addition to providing compliance services, and Clint’s unique skill set is a great fit for our hands-on approach,” Levine went on to say.
Ignite Consulting Partners, in partnership with DealerRE, is hosting a free webinar to answer questions about debt cancellation, collateral protection insurance and GAP products. The firms plan to discuss “the ins and outs of the products, the differences between them and how to conduct due diligence and determine which product is right for you and your customers.”
The webinar is set for 3 p.m. ET on Oct. 29. Registration for the session can be completed here.
The Fair Housing Testing Program conducted by the Department of Justice led to a lawsuit against a Maryland independent dealer.
On Monday, officials filed a lawsuit alleging that defendant Guaranteed Auto Sales along with its owner and manager, defendants Kelly Ann West and Robert Chesgreen, respectively, violated the federal Equal Credit Opportunity Act by offering different terms of credit based on race to those seeking to purchase and finance used vehicles in Glen Burnie, Md.
The Justice Department said the lawsuit is based on the results of testing the department’s Fair Housing Testing Program, in which individuals pose as prospective car buyers to gather information about possible discriminatory practices.
The complaint, which was filed in the U.S. District Court for the District of Maryland, alleges that defendants engaged in a pattern or practice of discrimination by offering less favorable auto-finance terms to African American testers than white testers.
Most significantly, officials said the complaint alleges that employees of Guaranteed Auto Sales told African American testers that they needed larger down payments than white testers for the same used cars, and told African American testers that they were required to fund their down payments in one lump sum, while they gave white testers an option of paying in two installments.
“Using race as a factor in determining credit terms, including the amount of down payment that a customer must pay, is despicable and illegal,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division.
“By filing this lawsuit, the Justice Department is acting to ensure that all individuals are treated equally regardless of their race as they seek information about auto financing terms and apply for credit,” Dreiband continued in a news release.
The federal Equal Credit Opportunity Act prohibits lending discrimination based on race, color, religion, national origin, sex, marital status, age, because an applicant receives income from a public assistance program, or because an applicant has in good faith exercised any right under the Consumer Credit Protection Act. The Justice Department’s enforcement of fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section.
Additional information about the section’s fair lending enforcement can be found at www.justice.gov/fairhousing.
The National Independent Automobile Dealers Association is looking to give members all the resources they need to be compliant with the state and federal regulations that oversee their retail and financing operations.
As a result, NIADA recently formed a strategic relationship with ComplyNet, a provider of compliance solutions in the automotive industry, to help independent dealers create a culture of compliance through a new compliance management system.
The NIADA CMS, powered by ComplyNet, is custom-tailored for independent dealerships of all sizes, providing the tools they need to achieve compliance and mitigate risk in the areas of sales, finance, environmental health and safety and information security.
“As an industry, it is important for auto retailers to demonstrate a culture of full compliance at the dealership level,” NIADA chief executive officer Steve Jordan said in a news release. “Trial lawyers, courts and regulators are more interested now than ever in finding dealers who miss the mark on compliance and consumer protection.
“We are confident that independent dealers who fully use the capabilities of the NIADA CMS across their employee base will be much better suited to understand and comply with the many legal and regulatory requirements of the used vehicle industry,” Jordan continued.
The association highlighted the NIADA CMS can provide role-based online training, electronic policy sign-off and other valuable resources with dynamic dashboards, allowing the dealership to continuously track compliance goals.
ComplyNet has provided compliance solutions to the automotive industry for more than 25 years, developing a cloud-based compliance management system for dealerships to achieve regulatory compliance, loss control and risk mitigation.
“NIADA’s commitment to providing affordable and easy to use compliance solutions for its members is a testament to its leadership team,” ComplyNet president and general counsel Adam Crowell said.
“We look forward to working with independent dealers to maximize their profits by reducing their risks of losses, injuries, fines and lawsuits through the compliance management system and other online and on-site services,” Crowell went on to say.
For more information, visit niadacompliance.com.
It’s been a busy May for Pennsylvania attorney general Josh Shapiro as his office made two moves involving independent dealerships in the Keystone State.
Earlier this month, Shapiro reached a settlement approaching $51,000 with a dealership in Mechanicsburg, Pa., involving seven allegations.
Then last week, the AG’s office filed a lawsuit against an operator with stores in Moosic, Scranton and Wilkes-Barre for allegedly violating eight parts of the state’s consumer protection law.
According to a news release, Shapiro finalized a $50,892.29 settlement that allows restitution for customers of New Kingstown Auto, owner Harry Laughman and employee Dana (Blosser) San.
The settlement, in the form of a petition requiring court approval, comes as a result of a lawsuit filed by the Office of Attorney General’s Bureau of Consumer protection alleging that the defendants:
— Advertised used vehicles for sale without disclosing the business name and address of the advertiser or the word “dealer.”
— Sold a used motorcycle as having 69,000 miles, when in fact the motorcycle had 153,000 miles.
— Sold vehicles without a valid dealer or salesperson license.
— Failed to forward to Pennsylvania Department of Transportation money and forms submitted by a consumer who purchased a vehicle with temporary registration tags in timely manner.
— Engaged in lease transactions with consumers that did not include required lease disclosures and were not compliant with applicable laws.
— Accepted installment payments from consumers on vehicles without holding the required installment seller license.
— Provided a consumer an installment sale contract that did not comply with requirements.
“Unscrupulous business dealers can’t dodge our Bureau of Consumer Protection,” Shapiro said Attorney General Josh. “I’m grateful for their hard work to put a stop to the defendants’ shady practices and deliver results for the people of Pennsylvania.”
According to that news release, one consumer, Richard Ridley of Carlisle, Pa., purchased a vehicle from New Kingstown Auto in 2017. The attorney general said assurances from the dealership indicated that the store would fix outstanding issues with the vehicle such as a check engine light and cracked windshield. However, Ridley said the dealership did not complete the repairs.
The attorney general also said Ridley paid his installment contract early but was then told by the defendants that he voided his contract and was forced to enter into a new purchase agreement that was unlawfully executed. Ridley is now in line to receive more than $800 in restitution for the repairs he had to pay for himself.
“I was manipulated by New Kingstown Auto every step of the way and provided false information about my car, my lease agreement, and the services the dealership would provide,” Ridley said in the release. “As a result, I paid hundreds of dollars out of pocket on repairs. The experience was incredibly stressful, but I’m grateful to the Office of Attorney General’s Bureau of Consumer Protection for their hard work to hold this dealership accountable and obtain restitution for consumers like me.”
BHPH Report obtained a copy of the lawsuit Shapiro’s office has taken against RCMS Auto Sales and owner Thomas Hashem.
According to the 73-page lawsuit that can be viewed here, the dealership allegedly has broken Pennsylvania consumer protection law, including:
— Misrepresenting the condition and roadworthiness of vehicles sold.
— Failing to disclose to purchasers that some vehicles were not roadworthy as the vehicles were unable to pass state inspection.
— Misrepresenting in advertisements, including website and dealer lot signage, that defendants have a credit restoration program to help customers restore their credit when in fact defendants do not have a credit restoration program.
— Misrepresenting that defendants have performed a “61-point” pre-purchase inspection on all vehicles and all vehicles are serviced by a licensed service technician when, in fact, the Commonwealth believes that the defendants do not perform a 61-point pre-purchase inspection nor are vehicles serviced by a licensed service technician.
— Misrepresenting to consumers that vehicles purchased were in a condition acceptable to qualify for a third-party warranty that defendants advertised and sold to consumers.
— Misrepresenting that a warranty was placed on “every vehicle” and that defendants service their warranties when in fact, in at least some instances, the vehicles sold were not warrantable due to pre-existing mechanical issues that defendants knew or should have known existed
— Failing to service warranties or otherwise remedy consumer vehicles within a reasonable amount of time without charge.
— Failing to include in at least six sales of vehicles whether the vehicles were new or used and a description of the prior usage of the defendants’ bill of sale.
The state AG is looking for RCMS Auto Sales to pay civil penalties $1,000 for each past and present violation of law. And since some allegations involve consumers age 60 and older, the Shapiro’s office is seeking $3,000 per violation for matters involving that demographic.
And along with surrendering dealer licenses, Shapiro’s lawsuit seeks costs for law enforcement’s investigation and prosecution.
Typically, conference organizers set an agenda ahead of time, but Ignite Consulting Partners tried a different approach and enjoyed great success with its first compliance-training event.
Last week, the firm hosted its inaugural Compliance Unleashed Conference for independent dealers and auto-finance companies as attendees completed a pre-conference survey designed to identify their needs and concerns.
“The idea was to bring compliance personnel together for an immersive learning experience focused on how to be a strong compliance leader,” said Steve Levine, Ignite’s chief legal and compliance officer.
Ignite co-managing partner Richard Hudson added, “Our classes not only focused on critical subject matter, but they were carefully designed to combine together to provide the audience with a clear action plan to make an impact.”
Levine and Hudson began the conference by addressing the importance of projecting compliance leadership within an organization, then presented the survey results and guided the audience with tips in a class entitled, “Building Your Compliance Success Story.” This segment was followed by an interactive discussion between service providers and the audience moderated by Hudson on how to approach vendor management.
Next, there were sessions on collections, credit reporting, preventing and defending lawsuits, building a compliance management system and sales compliance, all of which were crafted to provide critical insight that can be put to use.
To close the event, Hudson and Levine again shared the stage and presented two unique classes, “Action Items to Jumpstart Compliance When You Get to Work Tomorrow,” and “Lessons Learned Here and How to Communicate them within your Organization.”
Hudson said, “We felt it important to provide clear direction and action items.”
Levine added, “We hosted this conference to be an agent of change for how compliance is approached. Our goal is to motivate, educate and empower so that attendees can make an impact on their businesses when they return to work.”
To facilitate that goal, Ignite will include follow-up coaching to the attendees at no extra charge.
“We are sincere in wanting to help build a wave of highly competent and strong compliance leaders,” Hudson said, “and we think the follow up coaching will provide them with an opportunity to customize what they learned for their particular situations.”
“We are thrilled with the response,” Hudson continued. “To be able to bring over 70 folks together for our first event is validation of our approach.”
“Compliance folks we work with share a feeling of isolation in their efforts,” Levine went on to say, “so part of our goal for this event was to assist them with meeting and building a network with other people that share the same experiences.”
Given the enthusiastic feedback, Ignite is already planning a follow-up event next year.
“Just like compliance, our approach to this is to continually raise the bar and provide the industry with needed resources to keep improving,” Levine said.
For more details about the firm and its offerings, go to www.igniteconsultingpartners.com.
It’s a scenario pretty common to buy-here, pay-here dealerships. Store management tries to satisfy a dispute with an unhappy customer, but that individual turns to the internet to vent — and perhaps badmouth — about the dealer and its personnel.
It might cross operators’ minds to put a clause in an installment contract prohibiting such activities, but the National Automobile Dealers Association sent strong suggestion against that strategy stemming from what the Federal Trade Commission (FTC) could do as a result.
NADA recapped this week that the FTC announced its first enforcement action pursuant to the recently enacted federal Consumer Review Fairness Act (CRFA), suing three businesses and two business owners for allegedly violating the CRFA. The FTC alleged that the companies used form contracts that included clauses barring customers from sharing negative comments and demanded financial penalties (damages and attorney’s fees) against customers who did so.
The regulator said the businesses — including an HVAC contractor, flooring seller and horseback riding company — have reached a preliminary agreement with the FTC to stop using the contract provisions and to inform their customers that the provisions cannot be enforced.
When NADA spotted the development, the association said via a daily e-newsletter, “Under the CRFA, dealerships are prohibited from including provisions in any ‘form’ contract that seek to restrict people from posting honest reviews about the dealership, or penalize them for doing so. This includes any consumer contract or agreement entered at the dealership or in online terms and conditions.
“The CRFA protects a broad variety of consumer assessments including people’s ability to share their honest opinions about a business’s products, services, or conduct, in any forum, including social media. A business can be found to have violated the CRFA whether they actually seek to enforce such a contract provision or not,” NADA continued in special material to help stores.
In a separate blog post, the FTC also shared a trio of recommendations for dealerships and other businesses in order to comply with the CRFA. They included:
1. Review your form contracts.
Has it been a minute since you’ve read your form contracts? What do they say about consumer reviews or other communications covered by the CRFA? And where did the language come from in the first place? If you haven’t given your contracts the once-over since the CRFA took effect on March 14, 2017, it’s time to take a closer look. Read Consumer Review Fairness Act: What Businesses Need to Know to review the basics.
2. The FTC and states can enforce the CRFA whether or not a company follows through on its threats.
You’ve probably seen press reports about companies that have tried to enforce illegal provisions against consumers. It’s not the kind of publicity any business wants. But it’s a mistake to think you’re in the clear if you include those provisions in form contracts, but haven’t followed through against consumers. The CRFA establishes that the existence of an illegal contract provision alone could subject a company to a federal or state enforcement action — and the consequences can go beyond FTC or court orders. Companies can be subject to financial penalties for knowing violations of the CRFA.
3. The FTC Act also applies.
Courts have looked at companies’ practices related to consumer reviews through the lens of the FTC Act’s prohibition on unfair or deceptive practices. Of course, companies should comply with the Consumer Review Fairness Act, but questionable conduct also can be challenged under Section 5 of the FTC Act.
Textmaxx Pro chief executive officer Chris Leedom told Tech Tank competition audience members during the 2019 Digital Dealer 26 Conference and Expo that 88 percent of all business calls go unanswered on the first try.
Evidently that circumstance was well understood by the show attendees who voted the Sarasota, Fla.-based technology firm as the winner of the fun and informative contest.
Digital Dealer 26’s Tech Tank held on April 10 challenged five leading automotive retail technology firms to detail their technology and its value proposition to business owners in a fast-paced competition. Each contestant had just three minutes to introduce their new product and then answer questions from three industry experts for an additional three minutes. When the presentations concluded, several hundred audience members and the experts voted using a text message application to decide the winner.
Leedom recapped that he used just two visual slides and one visual aid — a cell phone — to detail the power of texting to effectively communicate with customers and prospects.
“My guess is that nearly everyone in this room has texted several people since the lunch break,” Leedom said to the audience members that nodded in agreement.
Leedom told the audience he called upon his decades of experience as an entrepreneur and CEO of a nationally recognized consultancy practice to develop Textmaxx Pro. The cutting-edge, technology platform allows businesses, including auto dealers, to communicate directly with customers and prospects in one-on-one conversations as well as the ability to market their business using SMS (texting) technology using broadcast texts.
Textmaxx Pro’s Tech Tank competitors included a digital F&I platform, a new website development solution, and two digital marketing platforms.
Leedom told the audience Textmaxx Pro’s main value proposition was the ability to communicate effectively in near real time with customers. While 88 percent of business calls go unanswered, Leedom said the opposite is true of text messaging. About 93 percent of SMS messages are read within 10 minutes and a return text is usually sent within 20 minutes, according to Textmaxx Pro.
“It’s the preferred method of communication for most people across virtually every demographic,” Leedom said. “Setting appointments, gathering information, marketing, and much more can be accomplished with lightening efficiency. Quick and effective communication with your customers dramatically improves customer service and profitability.”
Leedom thinks two of the main points he addressed were likely what won the audience over. The first was legal and regulatory compliance.
Using a texting platform to text clients is regulated by the Telephone Consumer Protection Act and carries with hefty fines for violations. Textmaxx Pro’s platform text can enable any business landline or other designated phone line, Leedom said, and that is the number that appears on the customer’s phone. The platform archives the entire body of texts for five years to protect all parties and comply with necessary statutes. If a customer opts out of the service, no one but the customer can get back on the platform.
“We designed this product to help businesses harness the power of texting while ensuring compliance,” he said.
The second value that intrigued the audience was the pricing structure. Leedom said the pricing varies by the number of texts sent out and is scalable to any size business, so monthly fees for any size operation are refreshingly low, typically between $100 and $300 per month.
One of the industry experts asked about integrating the system with the dealers DMS and CRM platforms.
Leedom said Textmaxx Pro is integrated with several very large DMS platforms and the API can be integrated easily with any existing software program.
“We are working with software platforms all the time on full integrations,” Leedom said. “Our API can integrate with virtually any software product.”
Leedom added about the Tech Tank competition, “It was a great format and a lot of fun. The three industry experts asked great questions that were certainly of interest to the dealers and managers in the audience. “There were strong competitors with great presentations, and we were pleased to come out on top.”
For the 2017 National Independent Automobile Dealers Association Quality Dealer of the Year, having a way to accept cash safely for payments on retail installment contracts is crucial to operating its store efficiently and safety.
And now a tool that can help buy-here, pay-here dealerships of all sizes has been enhanced.
QuotePro and Fiserv recently announced that they are facilitating faster, next-day availability of funds and helping mitigate security concerns for businesses that accept payments in cash.
QuotePro Kiosks are the latest generation of self-service machines that can provide a complete cashiering solution to businesses that accept payments via cash, check, credit and debit card. QuotePro data from more than 100 kiosks at businesses ranging from dealers to utilities and insurance companies shows that when given a choice between cash, check, credit and debit card, 70 percent of consumers paying at these kiosks are choosing cash.
Providing faster access to the cash deposited in a kiosk is where Fiserv can help. Its CorPoint cash management solution can capture cash transaction data from the kiosk, enabling banks to provide provisional credit for cash deposited at a business location.
“Rather than waiting for cash to be manually deposited at the bank by staff or having an armored car service to empty the kiosk, process and deposit the cash into the business’s bank account, the provisional cash capability enabled by Fiserv technology allows for next-day availability of funds,” QuotePro chief executive officer Marco Freudman said.
“That helps eliminate risk and improves cash flow. Our business clients have been asking for this capability, and we see it as a game-changer,” Freudman continued.
Texas Auto Center is one of the first businesses to roll out the new capability. The operation was the 2017 NIADA Quality Dealer of the Year.
“We love our QuotePro Kiosks because they help eliminate the need for staff to handle cash, reduce errors and security concerns associated with cash payments, and they can make change. Adding provisional cash services makes it a complete solution for us,” Texas Auto Center chief financial officer Mona Rodriguez said.
“It substantially reduces our cash risk and improves availability to next day. We can reduce the frequency of armored car pick-ups and still have access to our cash flow,” Rodriguez contined.
Pat Korb, president of financial and risk management solutions at Fiserv, elaborated about the collaboration.
“For many retail businesses, cash is the dominant form of payment and innovations in self-service and technology help reduce the burden of managing cash payments,” Korb said.
“Faster access to funds, reduced overhead and enhanced security are key benefits for businesses, and consumers appreciate the flexibility and convenience to pay in the way they prefer,” Korb went on to say.
Dealers can visit quotepro.com for more information.
It’s already been a November to remember for Ignite Consulting Partners.
First, the auto-finance compliance firm that caters to buy-here, pay-here dealerships of all sizes, announced that Steve Levine and Richard Hudson have expanded their roles as managing partners as co-founder Allen Dobbins will be stepping away from the business.
Then, Ignite Consulting Partners bolstered its team by adding Kelly Blankenship.
Blankenship joins the firm as Dobbins departs to pursue other business interests.
“We are grateful for Allen’s leadership, mentoring and the opportunities he has given our team. Most of all, we thank him for his friendship,” Levine and Hudson said.
“We are eager to advance Ignite’s core purpose of helping our clients understand and implement compliance best practices,” they continued. “Stay tuned because our vision is stronger than ever, and more exciting announcements will be coming soon.”
And the first announcement did arrive quickly with Ignite Consulting Partners hiring Blankenship, who brings extensive compliance experience and holds the distinguished CRCM and CCCP certifications. She is a graduate of the American Bankers Association National Graduate School of Compliance.
Levine mentioned Blankenship’s impressive background includes positions in public and private banking, fintech and financial services companies. She has developed compliance programs, training initiatives, policy management, board reporting and vendor management reviews.
“We are thrilled to add Kelly to our team. She brings diverse knowledge and fresh perspective with a track record of innovation that will benefit our clients,” Levine said.
“Ignite envisions Kelly helping us expand our services and add to our growing reputation as the leading ‘go to’ resource for financial services, banks and fintech companies in assisting our clients needs related to compliance operations, compliance management systems, policy and procedure review and development, and training,” Levine continued.
“Some of the areas that Kelly specializes in are UDAAP, FDCPA, SCRA, GLBA privacy, fair lending, risk management and information security,” Levine went on to say.
The firm can be reached at (817) 841-8255 or igniteconsultingpartners.com.
