Issue link: https://read.dmtmag.com/i/698493
www.PowersportsBusiness.com SOLUTIONS Powersports Business • July 11, 2016 • 57 What does "compliance is a must" mean to you? It could mean doing what the owner or direct supervi- sor tells you to do. It could mean following the manufacturer's recommendations or the laws of the federal government. Everyone has their own rules and regulations for you to follow — the difference being in some cases, the jail time. Personally, I would not want to put the owner of the dealership I work at in that kind of predicament. Not to mention the effect it could, and most likely would, have on myself and the owner. Being compliant and protecting customer information is absolutely critical. And if you do not protect it, you have broken the law. What does all of this mean: Red Flag, OFAC, Adverse Action and RBPN? Let's face it; we get busy. Someone wants this, while another person wants that. Your dealership gets busy. Contracts are being drawn up, waiting for signatures, deals to be finalized and paperwork to be mailed to fund- ing companies. It is easy to leave a contract lying around, or a scrap of paper with the customer's informa- tion on it. This is something that can't happen, so don't do it. This article will help educate you and prepare you to do the right thing. Treat it like you would filing your taxes — ignorance is not an excuse. RED FLAG This is a program to help prevent/stop iden- tity theft. These warning signs will alert you to this and give you next steps. According to CNNMoney, identity theft happens every two seconds. More identity theft than ever occurred in 2009, which makes sense because of the market crash. Did you know that you are required to follow the Red Flag regulation, and if asked, you must be able to prove that you did your due diligence? OFFICE OF FOREIGN ASSETS CONTROL (OFAC) OFAC is an office within the U.S. Department of the Treasury. This office monitors assets and flags those with a known association or considered to be part of a terrorist group, drug trafficking and the like. The OFAC results should be a part of the Red Flag report. If there is a problem, an alert with next steps will be generated for you to follow. ADVERSE ACTION This notice informs the prospective buyer that either credit was denied or a different loan rate based off their credit score is being received. This report does not hurt, nor does it change, the credit history or score. But once again, it is required. They are to keep the customer informed. Information is power. RISK BASED PRICING NOTICES (RBPN) This report tells the customer where he or she stands against other consumers. This notice is given to the customer. Now that you know what all of these terms mean, what next steps should you take? It is important that you find your options within your DMS, or outside of it, if credit reporting is not offered. As a dealership, if the credit reporting can be done inside the DMS, find one that is going to give you complete infor- mation. Some credit reports are not inclusive or are difficult to interpret. Make the process easy for all involved. If a salesperson has to access multiple sites to get information, chances are they will not comply. Remember this is the law, not a choice, and it needs to be monitored. How does your software handle this or reporting to the agency? Having a dashboard or report for auditing and monitoring is criti- cal. Not only does the law state you must be in compliance, but you must prove that you are. The easier each dealership makes the credit reporting process and the compliance notices/ reports, the better chance you have for success. The sales or F&I person should own compli- ance. However, in the big scheme of things, the dealership owner is the one responsible. If an individual isn't compliant, the dealership pays the price. If you think about it, it is like paying taxes. If someone makes a mistake on a return, there may be interest and fees assessed, and the dealership is the one who pays. Another part of compliance that is impor- tant to remember is that the information given to you by the customer is private. This infor- mation should be guarded and protected just like a person does with personal data. Identity theft happens when people do not protect their own information or someone else's. The question to ask yourself right now is: What is on the desks of my dealership? I have been in this industry for over 14 years. I have seen it all, from papers with per- sonal information on desks to personal papers being thrown away without being shredded. Yes, just thrown away into a trashcan. I have even seen some personal papers being used as notepads, then the notes have been given to customers or other employees. Protect your dealership; protect yourself, and protect your customer. Non-compliance penalties are civil penal- ties. A dealership can receive a fine of up to $3,500 per occurrence and will get an order from the courts stating that the dealership must comply. Can you imagine if the govern- ment could prove 10 instances of being non- compliant? That is a fine of $35,000. And if you continue to be non-compliant, that penalty increases up to $11,000 per violation. PSB Paula Crosbie is the training development manager with CDK Global Recreation. She has been training and consulting with powersports dealers for 14 years. She can be reached at paula.crosbie@cdk.com or 801/519-7570. With compliance, ignorance not an excuse FOLLOW ME What does "compliance PAULA CROSBIE