Regulations Across Your Dealership: Consumer-Facing Employees

on July 9, 2019

Regulators have sent a clear message to automotive dealerships: “If you mess with your consumers, your employees, or the environment, you mess with us.” It’s another way in which everyone who works for your business stands for the entire organization: their actions—or inactions—can place the whole dealership at risk.

But perhaps more than anyone, the people who represent your dealership to customers are the face of your organization. They hold your reputation in their hands and, accordingly, have dozens of laws and regulations to comply with. We’ve already looked at the F&I and service departments’ specific obligations, so let’s review everything your customer-facing employees are on the hook for:

  • The Americans With Disabilities Act (ADA) prohibits discrimination on the basis of an individual’s disability. Dealerships and their employees must make reasonable accommodations for those with physical and mental handicaps. Examples of ADA accommodations include wheelchair ramps, accessible parking spaces, websites accessible to the blind, interpretations for the hearing impaired, and more.
  • The Electronic Funds Transfer Act (EFTA) governs how people, including financial institutions, can use systems such as ATMs, POS (point-of-sale) terminals, online and phone-based payment systems, and other means of electronic fund transfer.
  • The Federal Trade Commission’s Privacy, Safeguards, Telemarketing Sales, and Warranty Rules lay out procedures for how dealerships and their vendors and service providers must protect consumers’ privacy and sensitive data, and regulates how entities should disclose warranty information and communicate with consumers over the phone. Additionally, the FTC prohibits organizations from engaging in unfair, deceptive, and abusive practices (UDAAPs). For more information about UDAAPs, click here.
  • The Internal Revenue Service requires, through its Cash-Reporting Rule, that any dealership that obtains more than $10,000 in cash in a single sale (or in total, from related sales) report it to the IRS within 15 days of the transaction, and follow other annual filing procedures.

Welcome to our series on the numerous federal rules and regulations that impact automotive dealerships. In this and upcoming articles, we’ll be taking a look at the roles employees at each department play in keeping your dealership compliant.

If you missed Part 1, which provides a bird’s eye view of regulations across your dealership, click here.

  • The Magnuson–Moss Warranty Act regulates what information must be included in consumer product warranties. Essentially, the law ensures consumers get accurate information about warranties and holds organizations accountable for the terms of their written warranties. It does not obligate any business to provide a written warranty.
  • The Office of Foreign Assets Control (OFAC) restricts the countries, as well as designated entities and individuals representing those countries, with which a dealership can do business. When the United States imposes an economic sanction against a country, OFAC makes sure domestic businesses do not violate that sanction.
  • The Telephone Consumer Protection Act (TCPA) specifies how and when companies can reach out to consumers through telephone calls, text messages, and other forms of telemarketing communication. Under the TCPA, organizations must obtain prior written consent from everyone on their telemarketing list, let consumers clearly know that consent is not a condition of purchase, and provide people on the list with a way to opt out.
  • Any time an individual does business or opens an account with your dealership, the USA PATRIOT Act of 2001 requires you to collect and maintain that person’s information and, if requested, share it with the Financial Crimes Enforcement Network (FinCEN). Believe it or not, “USA PATRIOT” is an acronym—it stands for “Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism.”

Next: Sales

In the next installment in this series, we’ll explore what rules your salespeople need to know. But you don’t have to wait until then to overhaul your workforce compliance program. See how easy it is to manage workforce compliance initiatives across your dealership using our automated compliance platform.

Download this!

Regulatory Compliance Guide

What are the latest regs in your state? And, more importantly, what do you need to do to stay in compliance with them? Use this guide as your quick reference of the EHS, HR, and Sales/F&I laws that directly affect your state.

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Toby Graham

Toby manages the marketing communications team here at KPA. She's on a quest to help people tell clear, fun stories that their audience can relate to. She's a HUGE sugar junkie...and usually starts wandering the halls looking for cookies around 3pm daily.

Toby GrahamRegulations Across Your Dealership: Consumer-Facing Employees

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