Given the always changing list of federal regulations, it’s very challenging for powersports dealerships to remain compliant. Yet, the compliance aspect of your business is critical. It’s the law. While you may not have been approached by your state government yet for an audit, you would be surprised that all it takes is a complaint to be filed about anything — for example running a credit check without perceived permission — to trigger a full-blown audit.
Getting your store to a place of compliance and maintaining that position is good for your business. It’s costing you dollars by way of leaving money on the table if you are not protecting yourself and your customers.
Yes, you need training. Compliance is learned through tools and resources. Laws change, and sometimes these laws fly under the radar where no one fully realizes the implications, so an annual check up is recommended. Every state has an agency that monitors compliance. Doing compliance tasks correctly will root out fraud and identify theft.
Sales teams should receive training for refusing a sale. You need to understand the Red Flags Rule and how to detect, prevent and mitigate identity theft. The Red Flags Rule requires that a dealer implement a program to identify the signs of identity theft and take appropriate action when potential identity theft is detected. Some common signs to look for include:
- Suspicious and/or inconsistent identification documents
- Credit history check with a fraud alert
- Partnering with experienced finance and insurance (F&I) professionals that provide hands-on training.
The Office of Foreign Asset Controls (OFAC) requires dealers check all customer names against the database of known dangerous individuals and organizations. OFAC training is essential, as the penalty for not complying is up to $10 million and 30 years’ incarceration. You need to protect your business from costly errors that could even put you out of business.
Partnering with experienced F&I representatives that provide hands-on training is a sound strategy for achieving and maintaining compliance issues. Dealers cannot afford to make mistakes when it comes to compliance. Consultants can help you successfully navigate laws and requirements in your industry.
Making sure your business is secure, appropriately staffed and fully trained is important. Compliance is real, and it is an area that requires attention. You don’t want to be that dealer that didn’t follow the necessary steps only to regret it.
Eric Pastva is a senior F&I specialist and business development leader with Vanguard Dealer Services. Eric has 21 years of auto industry experience and 12 of that within the business office. Eric has achieved both AFIP and Mosaic compliance.