Both a federal agency and multiple national associations are urging the Federal Trade Commission to delay implementation of amended Safeguards Rule.
However, if the regulation stays on its course to be enforced beginning in December, the Texas Independent Automobile Dealers Association (TIADA) is trying to help operators prepare.
TIADA recently reiterated that it launched a dealer portal earlier this year to educate dealers across the country and develop an affordable way to address some of the new requirements found in the FTC rule.
TIADA explained that the FTC amended its Safeguards Rule earlier this year, creating new requirements for non-banking financial institutions, including dealerships. The new rules become effective in December and are much more specific than the old rules.
A few key provisions to the updated Safeguards Rule include:
• Each dealership must identify a “Qualified Individual” who is responsible for the program within the dealership and reports to the dealership’s board of directors or management annually,
• Dealerships will be required to have a written information security program and manual,
• And dealerships will be required to have an employee training program.
TIADA pointed out the FTC is ramping up its enforcement efforts this year. According to its website, “The FTC has brought legal actions against organizations that have violated consumers’ privacy rights, or misled them by failing to maintain security for sensitive consumer information, or caused substantial consumer injury.”
Among other things, TIADA pointed out the dealer education portal was built to help dealers stay compliant.
“Our goal is for this training to be used as a tool for dealers to avoid inadvertent exposure of customer information, government enforcement actions, lawsuits, and bad press,” TIADA executive director Jeff Martin said in a news release.
TIADA is working closely with several state and national automobile dealer associations to create an affordable option for their dealer members and help drive revenue for the associations.
“We already have dealers from all over the country taking the course. If a dealer from Colorado takes a course through the portal, we send 50% of that revenue back to Colorado,” Martin said. “Since we already developed the course and have an online platform to deliver it, it just made sense to partner with other associations.”
The safeguards compliance course through the dealer education portal was designed specifically with dealers in mind. There are two courses available, one for the dealership’s qualified individual and another for all other staff.
There is a volume pricing option available for any dealership with ten or more employees who need to take the course.
TIADA said the courses are easy, quick, affordable, and specifically designed for dealers. The program includes model safeguards policies and agreements for dealerships at no additional charge.
For more information, go to www.txiada.org.
Chuck Bonnano is the vice president of dealer development at the National Independent Automobile Dealers Association. Brent Carmichael is the 20 group moderator, consultant and instructor with NCM Associates.
As engaging as both Bonnano and Carmichael are, a Zoom meeting just could not be the conduit for successful 20 group gatherings each dealership training and consulting expert has orchestrated for years.
“We realized right away that I couldn’t do a 20 group virtually for three days,” Bonanno said in an interview with BHPH Report after the NIADA tried to organize sessions for a fraction of that span when lockdowns began at the outset of the pandemic last spring.
During an episode of the Auto Remarketing Podcast recorded before the pandemic reached the one-year mark, Carmichael described why dealers are thirsty to learn through 20 group gatherings that are held in-person like they’ve been for decades.
“The engagement part of it is probably the biggest aspect of it,” Carmichael said. “You can’t do eight hours straight on a Zoom call. It seems like I have over the last nine months having four, five, six or more a day. It just doesn’t seem to work well for my dealer clients.
“That in-person interaction, there are more free flowing ideas when you’re in person as opposed to looking at a screen with maybe 18 little blocks of video up there,” he continued. “You get more in-depth discussions. I guess eight hours doesn’t seem like as much when you’re in a meeting room with a break every two to three hours, time for lunch. The interaction you have on those breaks is huge as well. Everyone is ready for human contact, if that doesn’t sound too corny.”
What’s probably not so funny is what Bonnano is seeing as alternatives to 20 groups, which have costs associated with being a member as well as for travel and accommodations to attend and participate.
“We’re hearing a lot of interest (about the return of in-person meetings), but we’re competing with social media sites that give free advice,” Bonnano said. “All I ever tell them is that it’s priced accordingly. I’ve seen people giving legal advice on a Facebook Group. You don’t know who this person is or whether what they just told you is even legal.
“But it does tell me there’s a lot of hunger for knowledge, instruction and direction. We’re real excited about this year and beyond coming back to it,” he added.
Sharing best practices
Part of the reason for that excitement is how well independent dealerships — in particular buy-here, pay-here operators — have navigated through the pandemic.
“I think what you had in most cases because you have long-time buyers, long-time salespeople, long-time collection teams, they were seasoned, more independent workers so that when they worked from home or remotely or split shifts or any of the other different strategies that were used, they were able to keep moving right along/ They adapted really well,” Bonnano said
“Those dealerships that were already buying cars online and some sort of platform for digital marketing, the staff and the team were already aware of how to do all of that, they didn’t have to invent it like some of my dealers had to on the fly,” he continued.
“What I was so pleased by with very few exceptions — and the PPP loans helped — but they kept their teams together,” Bonnano said. “Very few people bailed. There were a few people with underlying heath issues who were unable to go forward. But like I’ve said. They’re car people. They’re not going to go hide in a bunker for a year. They wanted to work. And even those that went home to work in accounting and some of the marketing people as well as the underwriting and collections people, most of them were thrilled to get back to the office because they really like their team and the culture.
“Most of these smaller dealers, most people are cross-trained so that when you had split shifts or working from home you could do more than just one thing. I think that helped a ton,” he added.
Resilient operators
NIADA spotted indicators of what Bonnano described not long after COVID-19 was declared a global pandemic last March.
The NIADA COVID-19 Dealer Impact Survey of 846 independent operators conducted from last May 9-14 — a follow-up to a survey orchestrated by NIADA a month earlier — found 63% of the dealerships that had furloughed or laid off employees a month earlier have started the process of bringing them back.
Overall, NIADA indicated 34% of the independent dealers said they are rehiring staff, 20% said they are not and 47% said the question was not applicable, meaning they had remained at a full-staffing level throughout the COVID-19 pandemic That was the same percentage as the previous survey.
According to the results, 39% of operators who are rehiring said they had experienced no problems in doing so, but 31% acknowledged their employees were hesitant to come back because they were making more through the government’s enhanced unemployment benefits than they had made at their jobs, and 19% said fear of the coronavirus was an issue.
The survey also showed dealerships opening up again, with 44% doing business as usual (compared to 27% in April), 34% open by appointment only and 10% selling online only.
NIADA discovered just 11% of dealer survey participants remain closed temporarily — down from 27% — and 1% reported they have closed permanently.
“The leadership came out,” Bonnano told BHPH Report this spring. “They were very quick to adapt to what was going on. Looking back now a year later, those first few weeks some people were thinking is this the end of the world? And rather quickly we were deemed to be essential businesses and now we have to figure out how to continue to operate.
“Everybody jumped right in there and we learned that we can buy cars online. We’ve been telling dealers for a long time that the digital world of buying is here. We definitely learned that we can collect remotely. I’ve got some companies where their collectors are still at home. They’ve basically been given the option to work from home as long as their productivity stays high and the results are good. And we can sell cars by appointment, sell them remotely, do it digitally. Again, everybody adapted real quickly like that,” he continued.
“As moderators and trainers, we’ve been talking about digital retailing, not digital marketing, for a long time. Car dealers in general sometimes are slow adopters. But being pushed into this, they recognized rather quickly that we can make this work and they did,” Bonnano went on to say.
Ignite Consulting Partners is counting down the days until May 17, which marks the beginning of its in-person compliance training event.
After the pandemic forced the firm to cancel last year’s Compliance Unleashed, Ignite Consulting Partners is preparing to host its three-day training session for independent dealerships and finance companies.
“We’ve missed our ‘in-person’ relationships a great deal,” said Steve Levine, chief legal and compliance officer at Ignite Consulting Partners. “We find that folks can often be intimidated by compliance subject matter, but that face-to-face interaction helps ease their minds and allows us to learn more about our clients to customize solutions that fit their specific operations.”
With plenty of new federal lawmakers now in place and new leaders coming at the Consumer Financial Protection Bureau and the Federal Trade Commission, Levine said much regulatory ground will be covered during the event, which will be at the Embassy Suites North in Dallas.
“Our curriculum runs the full spectrum, we’ll look in-depth about some of the new regulatory challenges ahead, what we can learn from past regulator activity and provide a whole range of ideas that will allow dealers and finance companies to build their defenses and avoid lawsuits,” Levine said.
“In addition, we have classes on collections, credit furnishing and dispute handling, human resources, advertising and more,” he went on to say.
Along with other members of the Ignite Consulting Partners team, including Richard and Robbie Hudson and Randy Henrick, Compliance Unleashed also is set to have appearances by Brent Carmichael of NCM Associates and David Brotherton of the National Independent Automobile Dealers Association.
While Texas was one of the first states to lift many pandemic-connected restrictions, Levine emphasized that Ignite Consulting Partners is committed to orchestrating an event that can be safe and rewarding as possible for attendees.
“We wouldn’t be having an in-person event if we didn’t think it would be a safe event,” Levine said. “We’re working with the hotel to make sure there is plenty of room and that all local safety protocols will be followed. We’ll certainly try to address any specific needs or concerns of our attendees. We feel that the vaccine rollout will be in full swing well before the event and that, coupled with the practices that will be followed, will allow for a secure experience.”
To register for Compliance Unleashed, go to this website.
Stemming from calls for social distancing to curtail the spread of the coronavirus, the Georgia Independent Automobile Dealers Association (GIADA) is hosting a webinar so operators can meet their continuing-education requirements needed for state license renewal by the end of March.
Instead of its typical in-person class, GIADA said it's orchestrating the webinar on Friday.
“GIADA is taking extra care and precautions to help prevent the spread of COVID-19,” the association said in a post on its website. “Our staff is dedicated to staying updated on and vigilant with important procedures from the CDC, World Health Organization, Georgia Department of Public Health and local authorities, all of whom are helping us accomplish this.”
GIADA noted that the association will be sending a legal document for the dealership to sign and return that the designee participated during the webinar.
“Once we receive the document, we will email your certificate to you,” GIADA said. “Not completing a (continuing education) is not an option, so we are making every effort to ensure all dealers can take the class in a timely manner and renew their dealers license by March 31.”
GIADA officials mentioned another element of its operations that being modified because of the ongoing crisis.
“Please mail or scan your titles to the GIADA Office and order your TOPS online whenever possible to prevent our office from being overcrowded until the current situation is cleared by the CDC,” association officials said. “This will protect you and our staff. We want to keep the GIADA office open, so we need to take these precautions.
“Thank you for your understanding. As always, we want to take care of the dealers in Georgia,” GIADA added.
For more details, go to giada.org.
Editor's note: This report has been updated to note the event has been rescheduled for Aug. 24-26 because of the coronavirus pandemic.
Compliance for buy-here, pay-here dealerships and finance companies that specialize in the subprime credit space can be extremely complex in connection with issues related to human resources, social media and advertising, as well as information security.
To help operations of all sizes and needs, Ignite Consulting Partners again is hosting Compliance Unleashed, the firm’s three-day conference that serves as a springboard to a year-round plan of support so companies can avoid pitfalls potentially resulting in swift penalties, or in the worst scenarios, going out of business completely. The event runs from May Aug. 24-26 in Fort Worth, Texas.
“The dangers faced don’t just come from car sales and financing, so we’ve included classes on diverse topics,” event organizers said. “Through this holistic approach, we aim to provide our participants with the skills and confidence to lead their companies on their compliance journey.”
The opening day includes a keynote presentation from Jessica Lesser, former head of Dallas field office for consumer protection with the Texas attorney general. Lesser also spent time as a vice president with GM Financial.
Educational sessions not only include presentations from the Ignite Consulting Partners team of Steve Levine, Richard Hudson, Kelly Blankenship, Randy Henrick, Jessica Cumbee and Bill Metzinger, appearances also are on the agenda by Brent Carmichael of NCM Associates and David Brotherton of National Independent Automobile Dealers Association
“We know that on a daily basis, business needs often force compliance initiatives to take a back seat to other priorities. That’s why it’s so important to take advantage of our time together and focus on issues that usually get pushed aside until a crisis brings them to the forefront. It’s our hope that the knowledge you gain here will give you the tools to be an impactful leader during these challenging times,” Ignite Consulting Partners said.
“We often hear that compliance personnel have two common obstacles — relevant subject matter training and resources to call upon when new issues arise,” the firm continued. “Our conference is designed to solve both of these. First, we provide valuable subject matter expertise. Secondly, and perhaps even more importantly, we plan this event to allow you to network with others and learn from each other.
“We don’t view our conference as a finite event, but as membership in a compliance community to facilitate both personal and business development,” the firm went on to say. “From our post-conference coaching sessions to our monthly webinars to our Compliance Unleashed ListServe, we are committed to enriching our community for the greater good.”
Ignite Consulting Partners also planned time for attendees to unwind with a reception on tap at the Dallas Cowboys Golf Club.
The complete agenda and registration details for Compliance Unleashed can be found on this website.
The National Independent Automobile Dealers Association is hosting a free webinar on Thursday focused on a business function the association is concerned that operators might overlook or not understand completely — maintaining compliance with federal mandates from the Occupational Safety and Health Administration (OSHA).
In this webinar, hosted by NIADA and presented by ComplyNet, operators will participate in “crash course” on how to complete a variety of tasks, including:
— Records that must be kept
— How to fill out OSHA forms properly
— When completed forms must be posted and provided to OSHA
— When specific incidents must be reported to OSHA
— Fines and penalties that can be levied for failing to fulfill these obligations
NIADA mentioned the presenters also will discuss the differences between repeat violations, willful violations, serious violations, and other-than-serious violations as well as review recent cases in which OSHA has initiated criminal proceedings against offenders.
The experts will also discuss the importance of analyzing injuries and near misses, and how this exercise can lead to fewer injuries and illnesses, greater productivity and increased savings.
“You can't afford to miss this opportunity to learn how this applies to you,” NIADA said.
The free webinar begins at 1 p.m. ET on Thursday. Registration for the session can be completed here.
Along with adding two more veterans to its roster of compliance experts, Ignite Consulting Partners plans to offer what the firm believes is the first free training offering of its kind.
Ignite is going to host a free webinar about completing the financing and delivery of vehicles to Hispanic customers by conducting the entire education event in Spanish.
The webinar will be led by one of Ignite’s newest consultants, Jessica Cumbee, who was formerly general counsel with Tricolor Auto, a leading provider of financing to Hispanic customers.
The session is scheduled for 3 p.m. ET on Feb. 11. Dealers and managers can register for the free event here.
“We feel this webinar is an important step to make compliance attainable for what has been an under-served market,” Cumbee said in a news release. “Many car dealership and finance company personnel speak Spanish as their native language, and I believe that explaining compliance concepts to them in the language with which they are most comfortable will help their understanding and retention.
In my experience, the compliance message doesn’t easily spread throughout a company, so providing this alternative is a way to increase awareness and protect the business,” she continued.
This free webinar is part of Ignite’s monthly series dedicated to important compliance concepts. Sales personnel, collections staff, administrative employees and those having customer interaction are all encouraged to attend.
“My plan is to cover the crucial compliance concepts in a way that is both entertaining and informative and encourages questions,” Cumbee added.
As mentioned, Cumbee is one of the newest additions at Ignite. Along with her time with Tricolor Auto, Cumbee has previously been general counsel with Spartan Financial.
The other expert who recently joined Ignite is a family name to readers of SubPrime Auto Finance News.
Randy Henrick joined the firm as the leader of Ignite’s new franchised dealer group. Previously with Dealertrack, Henrick’s background includes auto finance, privacy, data security and consumer credit. He is a frequent speaker at industry events and regular contributor to SubPrime Auto Finance News.
“Randy is a thought leader on dealer training and education, which philosophically aligns with Ignite’s vision. Plus, he brings a wealth of expertise that will be a benefit our clients, both franchise and independent dealers,” Ignite chief legal and compliance officer Steve Levine said.
It’s now past Labor Day weekend. Much of the year already has passed, and the holiday season will be arriving soon enough.
For dealerships that began 2019 with the intention of increasing in-store training, GWC Warranty compiled strategy to help managers overcome four primary obstacles they might have encountered delaying those educational improvements.
“Sure, your main goal is to sell cars. That goes without question,” GWC Warranty said in a company blog post. “Without finding ways to keep things fresh and to continue to evolve, however, you stand to risk falling behind the competition.
“You probably already understand this and therefore see the value in dealership training, but it’s easy to watch the busy days, weeks and months fly by without pursuing the training your dealership needs,” the company continued.
So, without further delay, here’s how GWC Warranty suggested overcoming those training delays.
Not enough time
GWC Warranty acknowledged this is the easiest excuse when it comes to avoiding a training program, but the company said it’s also the easiest to overcome.
“There are countless options for online training that you can complete on your own time,” GWC Warranty stated. “Convenience is just the first step though. Setting deadlines is on you.
“Give you and your team goals to complete certain coursework and you can begin holding each other accountable to chip away at the training iceberg,” the company continued.
Not enough money
GWC Warranty also recognized training can be expensive. But the company also insisted that it doesn’t have to be.
“Looking in unexpected places for on-demand training (like your vehicle service contract provider) might be your ticket to affordable — or even free — training resources,” GWC Warranty said.
“A quality VSC provider will value your loyalty and be able to provide training for your entire dealership that will be able to help you be more successful and efficient in every aspect of your business,” the company added.
Not enough people
Many independent and buy-here, pay-here dealers have a small team. Perhaps, the store is literally a one-man band with the operator doing every part of the store operations singlehandedly.
“You think training would be a waste of your time, right? Wrong,” GWC Warranty said. “Small teams need training that can maximize success and efficiency more than any others.
“If you’re running a small shop, you need to maximize on all your resources,” the company continued. “Learning best practices, pro tips and processes that diversify your skills could actually be the best use of your time.”
Not enough opportunity
Finally, GWC Warranty accepted the situation that some operators might strictly evaluate strategies based on figures, and they’ve historically had trouble quantifying the opportunity training holds.
GWC Warranty proposed, “When overcoming this objection, think about if you had two more upsells in the F&I office each month. Or if you sold five more cars. Or if you learned about a new product that could double F&I revenue.
“Unless you train on the processes and methods you can employ to achieve these goals, you’ll have no path to get there,” the company went on to say. “There is always opportunity and room for improvement in your dealership, and training is the road to get there.”
