Why Outsource?

Why should you outsource your compliance program
ACC’s Mission and Sole Purpose is to provide the automotive dealer with all the necessary tools to obtain total compliance, avoid violations, provide documentation and records to affirmatively defend actions which may be brought, and provide hands on assistance and direction in the compliance maze for:

1.OSHA violations (and to reduce the cost of workman’s Comp insurance)
2.EEO violations whether known or unknown
3.F&I violations (improper disclosure or improper credit statements)
4.GLB safeguarding customer information
5.Red Flags Rule (see attached)

Compliance in each of these areas requires constant training, auditing, adaptability and modification. Unless your dealership has personnel whose primary responsibility is compliance, it is likely you are not getting the job done, leaving your business exposed. Hiring a third party compliance consultant has definite advantages.

Why outsource? One of the major reasons to outsource your compliance program is that one never audits itself as well as a non-interested third party. Internal audits often allow, or overlook behavior benefiting a select few with detrimental and sometimes devastating effects on the business as a whole. Advantages to using Automotive Compliance Consultants as your third party compliance source are:

1.When there is an issue you know who to contact
2.Compliance is all we do all the time.
3.Our processes are being used across the country in multiple locations and have been scrutinized.
4.We are less expensive than what you would have to pay a committed individual in your dealership
5.Your compliance will not just be shelved, but become our number one priority for your store.
6.We are insured, and carry one million dollars coverage for each incident;
7.Copies of all required compliance records are kept to ensure protection against loss, theft or fire.

Automotive Compliance Consultants, Inc. provides in-depth analysis, training, procedures and plans in the following compliance areas:

OSHA
Complete safety manuals for all the required catergores (See attached Index)
Blood borne Pathogens
Emergency Action Plan
Emergency response plan
Hazard assessment
Hazard communitication
Hazardous Waste
Fire Prevention
Lockout Tagout
Oil spill prevention and response
Substance abuse program
Process safety management
Training for all employees is provided online with an acknowledgement at the end stating that they concluded and understood the training provided.
Complete unbiased audits of all the above, and internal disclosure of deficiencies. Our consultants work with management and staff to correct compliance concerns, address training questions, and update and revise plans as necessary.
A complete online MSDS manual kept in your Compliance portal.
DOT Certification for at least one individual
Mask Fit tests
Fork Lift Certification

EEO
Provide training for all employees through our e-learning online courses.
Specialized training for management.
Create and maintain signed acknowledgments from each employee that has completed training that they are aware of how to internally report any discriminatory or abusive behaviors.
Meet with management twice a year to determine issues in the employment area, concerns, needs, and other matters necessary to protect the business from costly claims.
Create a written procedure for employees to report discrimination and abuse claims to management, policies for management to follow in the investigation and handling of any reports, and procedures upon finding of any discriminatory or abusive behavior.

F & I
Complete training on correct terminology and proper procedures for full disclosure in F & I through our e-learning platform online.
Conduct quarterly audits of transactions to determine processes are being followed, that all necessary rescissions and acknowledgments are signed, and that all required documents and disclosures are in the deal jacket.
Create a workable compliance process around adverse action, red flags and OFAC that when implemented will provide compliant procedures, and defenses to claims that may be made.
Provide written acknowledgment by all managers that they have completed all training, understood it completely, and recognize the importance of implementing and practicing compliant procedures.

Red Flags
Provide training to all management involved in the process of structuring a deal so they have sufficient knowledge to mitigate the affects of identity theft and prevent the use of stolen identity in their store.
Provide Red Flags Software to aid in the prevention of a stolen identity being used to purchase a car.
Create the red flags manual and necessary updates, which will be signed and acknowledged by a duly appointed officer of the corporation.
Conduct twice-annual audits to determine the effectiveness of the program, incidence, if any, revisions which may be required, management concerns and questions, and complete any updates as necessary.

Graham Leech Bliley/Safeguards Rule
Provide training for all employees in an online environment that can be accessed anywhere as long as there is access to a computer. Each employee will be given their personal login and password and will have access to all courses to take freely at home or at the office.
Audit all training to ensure that the employees are taking their respective training courses.
Conduct semi annual audits of the physical premises to determine compliance with GLB, and all products mentioned above.
Conduct semi annual managers meetings to discuss all findings of the compliance audits.
Create and audit the dealerships ISP (Information Security Program) on a semi annual basis to ensure the audit trail for FTC requests, and for use in the defense of any claim.
The ACC “Compliance Solved” program was created so all employees of the dealership can receive needed training and assistance to deal with the quagmire of regulations that inundated our industry. Compliance Solved is by far the most comprehensive solution in the market today and provides superior value for the price. Compliance will not preclude the filing of claims, but will significantly reduce the number of claims, and allow your dealership to defend actions. Violations occur, but it is often the indifference of the employer and management team that results in turning simply damage claims into cases involving punitive damages and significant retaliatory damages. Ignorance in the compliance arena is not bliss. In fact, ignorance is interpreted as reckless indifference, blatant disregard, or an intentional violation. Beyond being required by state and federal government, compliance allows you to show customers that you care about their financial security, provides you a bases to defend government inquiries, and actions brought against you. Your cost of compliance will easily be recouped through better customer satisfaction, a reduction in the number of claims that require defending and possible insurance discounts that you may receive as a result of OSHA and EEO training.

ADVERSE ACTION EXPLAINED!!!!

The question arises quite frequently;“When do I have to send an adverse action notice?”. The simple answer is that an adverse action notice needs to be sent each and every time a customer is denied credit, does not accept terms of credit that are different than those applied for, and when credit is not even applied for based upon a poor credit score, or information from a third party. The immediate follow-up question is “Why do we need to send an adverse action notice, when the lender who denied the credit is sending the notice”? This second question is harder to answer from a legal perspective. Generally, the lender that denied the credit will in fact send the adverse action notice. The problem arises, however, when the lender fails to send the notice. If the dealership is relying solely upon the lender to send the notice then there are certain circumstances where they may be held liable when the lender fails to send the notice. As a practical matter situations where the lender who denied credit fails to send an adverse action notice are an exception to the general practice. The problem is that the dealership will not know whether or not the lender failed to send the notice. Therefore, when providing legal advice to a dealership concerning the sending of notices, the answer is to send them in each and ever case as required by the law. This precludes dealership personel having to decide on a case by case basis when to send them and when not to send adverse action notices. That being said, what most dealerships really want to know is when do they need to send adverse action notices in situations other than when a lender has denied credit.

In its simplified form the Equal Credit Opportunity and Fair Credit Reporting Act require adverse action notices to be sent to customers who have been denied credit, the customer does not accept terms of credit which are different from those requested by the customer, the customer is denied a loan based upon information provided by a third party other than the credit reporting agency, and/or the dealership chooses not to submit the deal to a lender based upon information contained in a credit report or provided by a third party, or the dealer chooses not to even negotiate or deal with the customer based upon information provided in a credit report or by a third party. As noted above, in each instance where the deal is submitted to a lender, it is more than likely that the lender will forward the required adverse action notice if credit is denied. Again, the safe practice for the dealership is to forward their own adverse action notices to cover those instances where the lender may fail to send notice.

The dealer will not be able to rely on a lender in those situations where the transaction is not submitted to a lender, or the customer walks after being approved for credit terms that were not applied for. For instance, Mr. and Mrs. Jones seek to purchase a new vehicle at 0% for 60 months. The agreement is submitted to the lender, who based upon the credit score will not fund at 0%, but will do the loan for 60 months at 5.75%. Mr. and Mrs. Jones are provided this information, and decide they will go elsewhere. In this scenario, the lender has denied the original terms of credit, and the customer has not accepted a counter offer. Because there may be some confusion regarding denial, it would be in the dealer’s best interest to forward an adverse action notice to Mr. and Mrs. Jones in accordance with the ECOA and FCRA.

Two situations arise where the dealer can not rely upon the lender to send any adverse action notice. The first situation is where the dealer chooses not to even submit the transaction to a lender based upon information contained in the credit report, or information provided to the dealer by a third party. In this instance, the dealer can not rely on the lender to send an adverse action notice, as the loan has not been submitted to any lender. The burden of forwarding the adverse action notice is 100% on the dealer.

The second situation occurs where Johnny Jones comes into your high-end dealership and wants to test drive an Audi R8. Before you even look for keys and a set of plates, you request that Johnny provide some basic information regarding his credit worthiness. Based upon the information provided and other information obtained, you decline to allow Johnny Jones to test drive the R8. Essentially, the dealership has made a decision not to extend any credit to Mr. Jones. Thus, an adverse action notice would need to be forwarded.

There are other examples where the sole responsibility of forwarding an adverse action notice would be the dealer’s. Each of these examples essentially involves the dealership not submitting the transaction to any lender, or making the outright decision not to deal with the customer based up information contained in the credit report or by a third party. In these cases, no paperwork has been submitted to any other agency or institution, and the dealer must comply with the requisite regulations.
The easiest way to avoid any confusion, and protracted discussions as to whether a notice should be sent or not, would to be to send an adverse action notice each time a customer is either denied credit, refused credit, no credit is even applied for, or the customer does not accept terms of credit provided in a counter offer. If the dealership sends a notice in each and every case, there will be no need to worry whether the lender failed to send notice and all will be well in the world of adverse action notice compliance.

Why run a background check?????

Who are you hiring? Who did you hire yesterday?

In May of 2009 there was an article in the Katy Times about the Harris County Sheriff’s Office looking for two individuals who had defrauded Houston Area Car Dealerships of nearly $750,000.00. The two gentlemen in question were obtaining employment at various automobile dealerships in order to obtain customer information. With the information, the gentleman financed numerous vehicles. After they were done at one dealership they moved on to another, and another.

It is unknown whether the gentleman in question had a criminal background of any kind. With high turnover of employees, it is not unusual for a potential employee to have worked at a number of dealership in the recent past. Given the amount of customer information contained at automobile dealerships, best practices would require that all references and prior employment be checked for each additional employee. In addition, a background check should be done.

Failure to run a background check on new employee hires, may be considered failure to use reasonable safeguards in the protection of consumer information. Not only in the automotive industry, but in other industries more and more identity thieves have been obtaining employment for the soul purpose of acquiring valuable customer information. Even if the employee is not being hired for a job that gives them direct access to customer information, dealership employees at all levels probably have some access. Service Department employees have access to customer vehicles which may contain information in them, and routinely obtain credit card numbers and verifications from customers. Management may worry about the cost of background checks for each and every hire, but the cost of not running the checks could be much higher. Each time a dealership provides a new customer with a privacy statement they are promising the customer in writing that they take reasonable safeguards to protect their consumer information. Reasonable safeguards would include knowing who your employees are, and whether of not you have just hired an individual or individuals that have recently ransacked other dealerships. Don’t end up as a headline. Run checks on all your new hires, from porters to the finance manager.

Automotive compliance consultants New Dealer program designed to solve all compliance issues

Compliance Solved

Since 2003 Automotive Compliance Consultants Inc. has consulted with automobile dealerships on compliance issues involving Gramm-Leach-Bliley, EEOC, Patriot Act, OSHA, EPA, Red Flag, and F&I. ACC implemented its WICS Program (walk through, inspect, compliance, security) to audit automobile dealerships on a quarterly basis. In connection with quarterly audits, ACC consultants have trained literally thousands of automobile dealership employees and provided the tools to allow them to institute various compliance programs. One of the cornerstones of the philosophy behind Automotive Compliance Consultants Inc., is that compliance with various federal regulations can not be obtained simply by obtaining a pre- written program or software. Compliance requires training of each and every employee in the dealership, a dedication to regular compliance audits, and instituting practices and procedures which promote and foster a compliant operation.

After years of working with automobile dealers, their employees, and management, ACC has listened to their needs and concerns. As a result, Automotive Compliance Consultants Inc, now offers “Compliance Solved”. Compliance Solved consists of five compliance programs covering GLB safeguard rules, F&I (consisting of reg Z, reg M, code of ethics and proper disclosures), EEOC (consisting of employee training, management training, hiring and retaining process, establishment of written procedures, and over all employee/employer relationships), OSHA complete audits and creation of the MSDS), red flags rule (including software for ID verification), and shredding services by a bonded and insured document destruction company. Each of the five compliance programs is now available for online training by dealership employees at any time. Unlike other online services Automotive Compliance Consultants Inc. knows that in order to obtain compliance, quarterly audits, and interaction with employees and management is necessary. With the ability to train your dealership employees online with “Compliance Solved; consultants are free to perform required quarterly audits, respond to issues raised by management, and to recommend procedures for changes or improvements to any of the compliance programs.

Given the myriad of Federal and State regulations which affect the automobile dealership, compliance is not possible when it remains the responsibility of only a few select employees. Each and every employee needs to know what is expected, what is needed to be compliant, and what the ramifications are for failure to abide by regulations. With “Compliance Solved” each and every employee in your dealership can be trained at times that are convenient for your business. Well trained employees improve compliance, improve customer relations and significantly reduce exposure to hefty fines and damages..

Red Flags Rule


By now I am sure everyone is aware the FTC has delayed enforcement of the Red Flag Rules until August 1, 2009. Delays in FTC enforcement, however, do not eliminate any of the potential civil liabilities; so there is no get of jail free card. Despite calls for Red Flag compliance for over a year now, we continue to see stories of blatant use of identity theft to make purchases. A recent example can be found in an article published in the Arizona Republic (http://www.azcentral.com/news/articles/2009/05/12/20090512abrk-dealershipcars.html)

The article discusses a 60-year-old man believed to be part of an identity theft ring who spent the last few months preying on dealers in Arizona using false ids and buying cars. The man in question allegedly went into the same dealership several times over the course of a few wks and purchased several SUVs. This is the kind of situation the Red Flag rules were created to avoid. A little investigation, and application of Red Flag procedures would probably have resulted in no sale, and avoided the headaches that are sure to follow.

We at Automotive Compliance Consultants, Inc. hear the grumblings from dealers daily about why they are required to be the identity theft police for the government. The reality is that a majority of dealers are conscience of the need to short circuit sales to people using another’s identity. Gone are the days where a transaction gone bad is a lender problem. The lender demands reimbursement from the dealer, the search for the car starts, and no one wants to receive an inquiry from the identity theft victim’s attorney. The whole idea around the Red Flag Rules is to stop theft from happening at the point of purchase. A good Red Flag program will protect your dealership from loss, bad publicity, and possible government fines and civil damages. Now that the law exists, you can be sure the Plaintiffs lawyers are trying to figure out a way to exploit it at the expense of each entity that fails to follow the guidelines.

What is required to be compliant with Red Flag, and mitigate the Identity theft that is rampant in our society and industry? Compliance with Red Flag Rules is a simple process for dealers that have embraced safeguarding customer information, and have created internal processes to ensure their customers’ protection.

Let’s first define “Red Flag”. It is a pattern, practice, or specific activity that indicates the possible risk of identity theft. We as “car people” are the most intuitive people period. We know when something isn’t right because for the most part anyone that has been in this business for any length of time probably has seen it all, and I do mean all. The reality is if something doesn’t seem right it probably is not. Here is what is required for Red Flag compliance:

1. Create a written program and implement it. The program must consist of three parts: (must be signed off by an officer of corporation)
a. detect identity theft
b. prevent identity theft
c. mitigate identity theft

2. The written program must contain “reasonable policies and procedures to:
a. identify relevant red flags;
b. detect red flags incorporated into the program;
c. respond to identity theft once detected to:
1. Prevent
2. Mitigate
3. Ensure that the program is updated periodically

4. All employees must be trained on how to implement the program

5. Exercise appropriate oversight of service providers

6. An annual report to the board of directors outlining the compliance activities.

In conclusion, the issue is not whether dealers have to be the police force for the Government, but that dealers should institute practices and procedures to make all employees more aware of what is going on and avoid questionable transactions. In today’s environment there is no reason to become involved with situations like the one in Arizona unless you are looking for the wrong kind of publicity.


Terry Dortch President/CEO Automotive Compliance Consultants, Inc. 60 B West Terra Cotta Dr #159 Crystal Lake, Il 60014 866-301-0593 www.compliantnow.com tdortch@compliantnow.com

AUTOMOTIVE COMPLIANCE CONSULTANTS, INC. HAS PARTERD WITH STONE META, INC. TO OFFER THE ONLY COMPREHENSIVE
TRAINING AND AUDITING PROGRAM FOR DEALERSHIPS

Chicago, IL (MAY, 2009) Automotive Compliance Consultants, Inc. announces their new online compliance Training Tool “Compliance Solved”. Automotive Compliance Consultants partnered with Stone Meta, Inc an automotive specific web and Software Company to develop the first complete compliance tool “Compliance Solved” that offers training modules focused on all areas of compliance in the dealership. Programs include OSHA, EEOC, GLB, Red Flags, F&I, and adverse action letters. This tool will be used in conjunction with our exclusive onsite inspections and audits so we will continue to be the complete turnkey solution. Now we are able to provide the dealer with a product to solve all their compliance issues including the various required reports and compliance documentation. No other company can provide “hands on”, in dealership, audits and monitoring.

Beginning May 1st “Compliance Solved” will be available for purchase. www.compliantnow.com, www.stonemeta.com

Automotive Compliance Consultants, Inc.
Contact: Terry Dortch (866) 301-0593