Who Taught Your Staff The Rules?


Smart Advice from Dealer Compliance Consultants

The auto­mo­tive indus­try is chang­ing dra­mat­i­cally and will become even more heav­ily reg­u­lated in the future. Deal­er­ships who con­tinue to oper­ate with­out being com­pli­ant will invari­ably strug­gle. Lack of legal com­pli­ance is not an option for deal­ers who want to stay in busi­ness and pros­per. Today’s deal­ers need to be proac­tive and cre­ative enough to change their processes so they can be more prof­itable as well as com­pli­ant.  It just makes good busi­ness sense.

A num­ber of long-standing deal­er­ship prac­tices are not nec­es­sar­ily legal or eth­i­cal any longer. Unfor­tu­nately, in many cases the old-timers have taught the new hires the “old school” way of doing busi­ness and the prob­lem goes on and on.  Many deal­er­ship employ­ees have never been prop­erly trained in com­pli­ance mat­ters, so they sim­ply rely on doing busi­ness the way it’s always been done.

Some of the prac­tices which have evolved in the auto­mo­tive indus­try are now con­sid­ered to be uneth­i­cal or ille­gal.  As a result, the gov­ern­ment has increased it’s reg­u­la­tion of retail trans­ac­tions in order to help pro­tect con­sumers and law firms have found a tremen­dous oppor­tu­nity to rake in mas­sive judg­ments against deal­er­ships. To them, it’s like shoot­ing fish in a bar­rel. Edu­ca­tion is the first and most vital step towards employee account­abil­ity. After all, if employ­ees don’t know or under­stand the rules, how can they be expected to fol­low them? Igno­rance is not an excuse for break­ing the law and it cer­tainly won’t mit­i­gate poten­tial dam­ages. Deal­ers are entirely respon­si­ble for mak­ing cer­tain that these laws and reg­u­la­tions are followed.

Does your staff have suf­fi­cient knowl­edge to avoid poten­tial lawsuits?

To pro­tect them­selves, deal­er­ships should fol­low defined processes and employ a con­sis­tent train­ing pro­gram.  The most suc­cess­ful deal­ers use com­pli­ance as a way to ensure con­sis­tency and trans­parency in their sales process, thus increas­ing both sales and prof­itabil­ity. Well-trained peo­ple not only por­tray a more desir­able image, but they will pro­duce bet­ter results for their orga­ni­za­tion. In addi­tion to shield­ing your com­pany from lia­bil­ity, train­ing can also reduce expo­sure to puni­tive dam­ages. The Supreme Court held in 1999 that com­pa­nies can be pro­tected against an award of puni­tive dam­ages if they make good faith efforts to com­ply with laws.  If a deal­er­ship can prove that it took appro­pri­ate steps to edu­cate, audit and super­vise employ­ees, it will have a much stronger defense against any claims.

Don’t put the busi­ness and the rep­u­ta­tion that you have worked years to build at risk. Take com­pli­ance seri­ously, put a com­pre­hen­sive com­pli­ance plan in place, and act quickly to address fail­ures and defi­cien­cies. An invest­ment in com­pli­ance pro­grams and train­ing will pro­tect your assets, your employ­ees, your cus­tomers and your good name.

More good advice from the folks at Dealer Com­pli­ance Con­sul­tants can be found on their web­site. Read more arti­cles here.