Pub. 5 Issue 1

12 W hen legislation is overly broad, being compliant with that legislation becomes extremely difficult. Automotive compli- ance provides a good example. Dealerships are subject to a seemingly unending list of regulations that affect almost every aspect of running the business, and failing to comply can create serious trouble. All of the following are regulated: • Buying • Communicating with customers • Financing • Formatting emails • Insuring • Preventing identity theft • Reporting cash payments that are excessively large • Selling Consider the following: • Cash payments: If a dealership accepts an extremely large cash payment, the IRS wants to know about it less than two weeks after a sale has been made. Failure to report exposes dealerships to the very real possibility of big fines and time in jail. • Customer communication: There are many different ways to communicate with customers, but there are also many rules about how that communication is to take place. Most states have rules about how a vendor can contact someone, not to mention limited contact times. Dealerships are required to honor “Do Not Call” lists, must follow rules about the information that is included in email messages, and are also restricted when it comes to using pre-recorded messages. • Identity theft: If a dealership doesn’t follow procedures to prevent identity theft, not only does the dealership lose valuable inventory, it can be held legally accountable for not catching the person who committed the robbery. What can you do to protect yourself when it comes to automotive compliance? • Choose a compliance officer • Train the dealership’s staff • Put your dealership association to work Choose a compliance officer One smart strategy is to have a compliance officer whose job is tomake sure business problems are being solved correctly.Why should dealerships have a specialist instead of delegating to a gen- eral manager or a sales manager? The following reasons apply: • As should already be obvious, keeping a dealership compliant is a fulltime effort all by itself. For extremely large dealerships, it may even be necessary to assign this important work to more than one person. • Having a designated compliance officer prevents a con- flict of interest. What is the conflict of interest? Someone who is protecting the dealership is going to focus on making sure problems are resolved correctly. Someone whose salary is determined by commissions may choose to overlook those problems. • Customers like having a clear process for resolving com- plaints, so having a compliance officer is also a way to improve the dealership’s reputation. According to a 2016 Total Dealer Compliance survey: • More than 30 percent of those who were surveyed said they had submitted a complaint to a dealership but were unhappy with how the complaint was resolved. • More than 50 percent of those who complained were convinced the dealerships were not interested in fixing the problem they’d reported. Dealerships and Automotive Compliance