The Consumer Financial Protection Bureau has, in recent years, been working to regulate dealerships through lenders, which means that compliance has become a larger topic in the auto finance industry. Dealers have the potential to save thousands of dollars in legal fees if they operate in the most compliant manner possible. Proactively investing in compliance training will educate staff and give them the needed skills to maintain dealership profitability under increased scrutiny.

Gramm-Leach-Bliley Act

Dealers must protect consumer information and data under the 1999 Gramm-Leach-Bliley (GLB) Act. Under the act, consumer information and data cannot be used or disclosed in specific instances, which requires dealerships to know and adhere to privacy and opt-out notices. Civil penalties for violating the GLB Act can range up to $10,000 for an individual that is personally responsible, while a larger penalty of up to $100,000 can be issued to the financial institution that is being represented.

Advertising Fuel Economy

Fuel economy advertisements on all new vehicles must be labeled with "estimated city mpg" and "estimated highway mpg" if city and highway numbers are listed. If only one number appears, it has to include the proper corresponding label. This regulation is to prevent consumers from mistakenly believing that the estimate is for the incorrect fuel economy type. Additionally, each estimate must match the exact car make and model that it appears on. Penalties for this type of violation could range in the thousands of dollars.

Magnuson-Moss Warranty Act

The Magnuson-Moss Warranty Act requires sellers of consumer products to provide detailed information about the product's warranty coverage. Warrantors must designate the warranty as full or limited in writing, in addition to providing clear and easy to read documents to consumers. Parties violating the Magnuson-Moss Warranty Act can be sued in state court for expenses that the consumer has encountered.Compliance and Dealership Profitability

Disposal Rule

Consumer reports often contain personal information, which means they must be properly destroyed or erased under the Disposal Rule when they are no longer needed. This rule was established so that individuals without proper authorization could not obtain or view sensitive consumer data. If an organization is found to be non-compliant, the individual can sue for actual damages in court.

CAN-SPAM Act

The CAN-SPAM Act, established in 2003, sets standards for commercial emails and allows recipients the right to stop receiving them when requested. Organizations must follow rules such as:

  • Clearly identifying emails as ads
  • Telling recipients how to opt out of future emails
  • Refraining from using false or misleading header information
  • Honoring opt-out requests within 10 days
  • Including a valid, physical postal address in each message

Each violation could result in a penalty of up to $16,000. The company that sent the message and any other company being advertised could also be held accountable for this type of violation.

Remain Profitable at Your Dealership

While it may cost a significant amount of money to operate in compliance, it could prove to be very beneficial over the course of time. Your dealership is less likely to receive compliance violations if everyone is properly trained.

Our team knows that dealership profitability is important, which is why we recommend partnering with Auto Credit Express. We will provide high quality leads and other innovative dealer products that make selling easier. Learn more on how to maximize your revenue by calling us at (888) 535-2277 or by filling out our contact form online. One of our representatives is standing by to assist you.