Not every dealership is conducting adequate training, however, and certain risk areas are greater than others. The dealerships we surveyed were especially exposed in terms of compliance with the Federal Trade Commission’s Red Flags Rule.
Of all the areas of exposure we looked at, however, unsecured paper files were the worst offender. Not enough dealerships are locking up their physical documents.
Keep in mind that you’re putting your reputation on the line—along with a ton of money—should someone get into your files. Think of the kinds of data you’re storing in your binders, folders, and desk drawers—and think about how much damage theft of that information could cause your customers.
Unsecured paper files amount to violations of the Gramm–Leach–Bliley Act. GLBA penalties can range up to $10,000 per violation for officers and directors who are found personally liable. For the financial institution liable, penalties can reach up to $100,000 per violation—and criminal penalties include additional fines as well as imprisonment for up to 5 years.
A significant number of dealerships out there seem to not understand the risks they face. More than 1 in 10 dealerships haven’t trained employees on critical risk areas across the board.
On top of that, 21% of our respondents couldn’t tell where their exposures lie. If you can’t see who hasn’t been trained or what’s broken, you can’t plug any holes—and the liabilities only start to compound from there.
Take the Assessment
Curious how your F&I department stacks up? Take the Program Grader for yourself and see how you score. It’ll take just a few minutes and give you information you can use to avoid tens of thousands of dollars in fines—or worse.
Take the F&I Program Grader. When you’re done, our compliance experts are on hand to discuss your results.
16 Rules and Regulations Your F&I Department is On the Hook For
Dealerships operate in an increasingly complex environment of federal, state, and local oversight. We’ve gathered the 16 most important laws, rules, and regulations for your dealership's sales F&I department.
Time to button up your sales F&I department. Start with this eBook.