Issue link: https://read.dmtmag.com/i/410960
20 • October 6, 2014 • Powersports Business FINANCE www.PowersportsBusiness.com If any person at any time day or night could walk in to your dealership and pick up or view a customer deal folder with private information, that is a privacy breach. So, if your finance office is not locked, if folders are on the desk or in an unlocked drawer, if salespeople have access to folders at any time in an unsecured area, that's an $11,000 fine for each folder if an auditor walks into your dealership unannounced. You must have a "privacy notice" which describes your policy for sharing private cus- tomer information. Finance offices should be enclosed, so ver- bal private conversations cannot be overheard. PULLING CREDIT Many smaller dealerships have chosen not to pull credit at all and leave that up to their finan- cial institutions. This alone will not exclude them from privacy-related fines. Pulling an individual's credit might just be the best way to identify Red Flags, and help you determine if you would like to even accept a check on their behalf. Here are some guidelines to follow if you choose to pull credit at your dealership: It is best to gain permission with a signed credit application before pulling anyone's credit. If this is done online, ensure a check- mark is provided authorizing the credit pull. Giving copies of the credit report to your customer might be against your state's privacy rules. In most states, it is permissible to pro- vide a "summary" report that shows the over- all score rather than the entire report. Finance managers may review the report with their customers without providing a copy to them. Determine who is providing the "turn down," or derogatory report, to the customer. Most credit pulling companies and banks will provide the derogatory letter for you, but it is up to you to determine who exactly is provid- ing the letter. It may be in the best interest of your dealership to provide a standard letter to any "turned down" customer no matter what. DISCLOSURES What exactly did your finance manager share with your customer, and for what price? Does your dealership use a menu system to assist with presentation of products? How can you be sure your finance managers disclose exactly what their price and payments are with — and without — products added? The Consumer Financial Protection Bureau has strict guidelines for disclosures and has been very active in the closely related auto- motive industry to help provide equal oppor- tunities for all. The CFPB has been trying to implement rate markup and product markup guidelines, and many banks and dealerships have followed suit to ensure they document that they have indeed been fair to all. GUIDELINES FOR PRODUCT PRICING AND PAYMENT DISCLOSURES You are opening a can of worms if your sales managers present payments only to close a deal. Prices and interest rates may not be esti- mated, but must be quoted exactly as is. The best place for this to occur is in the finance office. Once customers are in the finance office, they have the right to know exactly how much they are paying for their unit, in addition to any fees. Their payments also must be disclosed, with terms and payments clearly identified. Your menu system should allow you to quote both a base payment with terms, and payments with optional products. It will also allow you to show the cost of each product and an individual added payment for each product, given a certain interest rate. You may not offer a lower interest rate only if a customer buys a certain product. Have your customer sign the menu, ini- tialing exactly which products they would like to purchase, and which they would like to turn down. Sometimes a separate form adds clarity. Offer the same products if they are avail- able to each customer. If a customer claims they were not offered GAP for their motorcycle and they total it, you may be on the hook if you have offered GAP to other buyers. The bottom line on compliance and disclo- sures? Be accurate, be private, be safe and treat everyone that enters your dealership without discrimination of any type. PSB Brian Gallmeier, founder of Income Develop- ment Partners, uses his powersports experience to train F&I departments. He can be reached at bgallmeier@charter.net or 612/616-8611. GALLMEIER CONTINUED FROM PAGE 18 mercial success of the Sea-Doo Spark watercraft, Can-Am Spyder and side-by-side vehicles. Our inventories in the channel are in good shape, and this bodes well for the second half of the year. As such, we are reaffirming our guidance for fiscal year 2015 with expected continued acceleration of revenues and a strong finish in the fourth quar- ter driven by sales of snowmobiles and deliveries of new products." Revenues increased by $159.1 mil- lion, or 25.6 percent, to $780.0 million for the three-month period ended July 31, 2014, compared with $620.9 million for the cor- responding period ended July 31, 2013. The revenue increase was mainly due to higher wholesale in Seasonal Products and in Year- Round Products along with an increased wholesale of their related parts, accessories and clothing. The increase was partially offset by increased sales program costs relating to Year-Round Products. The increase in revenues included a favorable foreign exchange rate variation of $35 million mainly related to the strengthening of the Euro and the U.S. dollar against the Canadian dollar. Revenues increased by $113.4 million, or 8.0 percent, to $1,538.6 million for the six-month period ended July 31, 2014, compared with $1,425.2 million for the corresponding period ended July 31, 2013. The revenue increase was mainly due to higher wholesale in Seasonal Products and their related PAC, partially offset by lower wholesales and higher sales program costs in Year-Round Products. PSB BRP CONTINUED FROM PAGE 19