How to Maintain Compliance While Working Remotely

The dynamics of the auto retail industry have dramatically shifted over the past few weeks as dealers shut down showrooms and learn to operate digitally. The good news here, is that while the backdrop has changed, many dealers still have the capability to work deals – from leads to contracts – remotely.

In today’s climate, compliance has only become more crucial.

However, as dealers navigate this uncharted territory and explore new guidelines and processes to win sales, regulatory compliance is increasingly important, especially as we adapt to new ways of engaging with consumers. Working remotely can, in many ways, add another layer of difficulty to maintaining compliance.

Here are some best practices to help dealers adjust and ensure compliance even in this new virtual working environment:

Secure Consent and Protect Deal Data

Connection is now more important than ever … Your internet connection that is. When working remotely, an encrypted internet connection is essential, as there are a number of consumer protection laws in place that safeguard customer information. In addition to the internet connection, you can also take steps to protect personally identifiable information (PII) by making sure consumers are entering data on secured application portals rather than simply emailing information. It is also critical you remember to get customer consent to do business and authorization to pull credit reports and eSign documents.

Respect FTC Marketing Restrictions

With face-to-face interactions currently limited, many dealers are turning to their technology arsenals to better engage consumers. Think text messages, emails, phone calls, video chats and more. However, just because someone gave you their contact information once does not mean you are legally allowed to market to them without their consent now. To stay compliant with the Federal Trade Commission (FTC) and protect your dealership, make sure to periodically review your direct marketing target lists and remove anyone who has previously expressed that they do not want to be contacted via the means of communication you are planning to use.

Anyone on a “do not contact” list – whether federal, state or internal – should be considered a no-go to contact.

Protect Against Fraud and Scams

While it is typically a straightforward process to verify that the person sitting in front of you is who they say they are, things get a little more complicated when selling a vehicle or F&I product virtually – even if it is over video chat – or to a customer wearing a protective face mask in-store. Unfortunately, there are criminals out there looking to capitalize on this situation. In fact, the FTC recently issued a warning about identity theft scams that leverage the ongoing coronavirus pandemic as a pretext. Make sure your staff is staying vigilant and consistently running OFAC checks and Red Flag alerts. You should also utilize out-of-wallet, or authentication, questions as needed to verify a customer’s identity. If possible, record the video sessions with the consumer; assuming you have notified them that you will be recording the session.

Double Check Your eSigning Solution

Electronic signing gives you the flexibility to finalize deals remotely. From contracts and credit applications to credit bureau authorizations, privacy notices and the entire funding package, it is now easier to capture signatures digitally where permitted by law. This also makes it simpler to submit the final contract package electronically, a nuance that is becoming increasingly critical as dealers look for faster funding to improve cash flow.

While this is all well and good, not all eSigning solutions guarantee the legally binding status of a contract. Among other things, dealers must be able to verify the identity of the individual signing remotely and confirm the documents are accurate, complete and properly stored.

Set Yourself Up for Remote Delivery Success

The delivery of vehicles outside of the dealership also brings potential risks and challenges. Therefore, it is important you check with your own legal team to better understand the controls you need to have in place. Some of the considerations for those delivering vehicles remotely include:

• Ensure your contract start and delivery dates are the same.
• Reconfirm the customer’s identity and execute a proof of delivery document.
• Ensure that you provide the consumer with all of the same documents they would have received in the dealership.
• Do not negotiate terms and conditions of the deal at the consumer’s home, as this could invoke a three-day rescission period.
• Confirm that your lender agreements allow for the delivery of vehicles outside the dealership.

In today’s climate, compliance has only become more crucial. Work with your legal counsel to create a plan to address compliance considerations that may be more challenging to follow remotely and ensure your revised operating procedures still adhere to requirements and regulations. These steps will be key to maintaining success and safeguarding your dealership during these uncertain and virtual times.

Andy Mayers is the lender solution strategist for Dealertrack.

Originally posted on Auto Dealer Today