Thompson & Associates CPAs, an accounting and consulting firm with experience involving automotive dealership operations and dealership fee analyses, made the argument that dealership documentation fees are not “junk fees” as they’ve sometimes been referenced by the Federal Trade Commission and other regulators.

And the firm is using the real-estate market to support its reasonings.

Thompson & Associates CPAs acknowledged the FTC has generated increased discussion regarding dealership doc fees and whether certain charges may withstand heightened regulatory scrutiny.

According to the firm, the issue may ultimately center on whether dealerships can substantiate the relationship between documentation fees and the administrative work being performed.

“The FTC does not appear to be focused solely on whether consumers dislike a fee,” said Michael Thompson, who is managing director of Thompson & Associates CPAs. “The issue increasingly appears to involve whether a dealership can demonstrate that the fee bears a reasonable relationship to actual transaction related administrative costs and whether the fee is clearly disclosed.”

Through a news release, Thompson pointed out that the FTC has recently increased enforcement activity involving automotive pricing practices, including actions involving pricing disclosures, add on products, and allegedly unsupported charges.

The firm pointed out that many dealership documentation fees may be associated with operational and administrative functions such as:

—Title processing
—Registration work
—Compliance procedures
—Lender documentation
—Electronic filing systems
—Records retention
—Personnel involved in transaction administration

“In many respects, dealership documentation fees are not conceptually different from administrative or closing related fees charged in other industries, including real estate transactions,” Thompson said.

According to the firm that has performed dealership documentation fee cost analyses in more than 20 states, one distinction regulators may increasingly examine is whether a dealership can reasonably support the fee through documented administrative costs, established operational procedures, and consistent disclosure practices.

The firm went on to note that dealerships facing increased scrutiny may benefit from maintaining:

—Documented cost analyses
—Written fee policies
—Consistent disclosure procedures
—Operational support demonstrating the administrative activities associated with vehicle transactions.

“Regulatory attention has increasingly focused on undisclosed add-ons, misleading pricing practices, and charges that may lack substantiation,” said Thompson, who has also provided testimony and consulting services involving dealership documentation fee structures and related automotive retail practices in multiple jurisdictions, including South Carolina and Texas.

“The issue is not necessarily the existence of a fee itself, but whether the fee can be supported and properly disclosed,” Thompson went on to say.

For more information about Thompson & Associates CPAs, call (678) 382-0899 or www.atlantacpas.com.