In our ongoing series on advertising sales and finance compliance for dealers, we’ve reached a critical juncture: Step 5. This step focuses on identifying, tracking, and resolving issues that arise during your compliance efforts. Let’s dive into why this is crucial and how to implement an effective system.
The Importance of Issue Tracking
As you progress through your compliance journey, you’ll inevitably uncover issues through various means:
- Website assessments
- Deal jacket audits
- Regular walkthroughs
The key is not just finding these issues but ensuring they’re properly tracked and resolved. This systematic approach is vital for maintaining ongoing compliance and demonstrating your dealership’s commitment to best practices.
While companies place a substantial focus on EHS management (and with good reason), crossing the line in F&I can do substantial damage to your dealership's reputation, plus fines starting at $10,000, and the potential for criminal charges.
Implementing an Effective Tracking System
To successfully track and resolve compliance issues:
- Designate Responsibility: Assign a specific person responsible for addressing each issue. This could be:
- General Manager
- General Sales Manager
- F&I Manager
- Document Issues: Keep a detailed record of each issue identified, including:
- Date discovered
- Nature of the issue
- Potential impact
- Person responsible for resolution
- Track Resolution Progress: Monitor the steps taken to resolve each issue and record:
- Actions taken
- Date of resolution
- Any follow-up measures implemented
- Regular Review: Conduct periodic reviews of your issue log to ensure nothing falls through the cracks and to identify any recurring problems that may need a more systemic solution.
The Bona Fide Error Defense
One of the most compelling reasons for maintaining a robust issue tracking and resolution system is the concept of the “bona fide error defense.” This legal principle, recognized in many states, can be a powerful tool for dealerships:
- It acknowledges that despite best efforts, mistakes can happen.
- It provides a potential defense against claims for punitive damages and attorneys’ fees.
- To leverage this defense, you must demonstrate:
- Proactive measures to identify compliance issues
- A system for addressing and correcting these issues promptly
- That any violation was a genuine mistake, not a systematic failure
By meticulously tracking and resolving issues, you’re not just improving your compliance – you’re building a documented history of your dealership’s commitment to following the rules. Remediating issues and stopping the same issues from repeating in the future are key to this defense, and you should contact you legal counsel for legal advice.
Taking Advantage of Technology
While not mandated, technology can significantly enhance your issue-tracking efforts:
- Automated scanning tools can help identify pricing discrepancies on your website.
- Task management systems can streamline the process of assigning and following up on issues.
- Digital audit tools can make deal jacket reviews more efficient and thorough.
Compliance in Motion: Keeping Your Dealership on Track
Step 5 in our compliance journey – tracking and resolving issues – is more than just a box-ticking exercise. It’s about creating a culture of continuous improvement and demonstrating your dealership’s commitment to ethical and legal practices. By implementing a robust system for identifying, tracking, and resolving compliance issues, you’re not only protecting your business but also building trust with your customers and regulators alike.
Remember, compliance is an ongoing process. Stay vigilant, keep improving your systems, and always be ready to adapt to new challenges. Your dedication to this process today can save you significant headaches – and potentially costly legal issues – down the road.
KPA helps dealers limit liability from the first contact to deal close.
With our complete compliance system and team of advertising, sales, and finance compliance experts to guide you, minimize your risk, save money, and recapture countless hours of wasted time.
This structured approach ensures that dealerships are not only compliant but also continually improving their compliance practices, leading to safer, more trustworthy operations.
Next week let’s look at Advertising and Deal Jacket Reviews.
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