The webinar we’ve all been waiting for: Adverse Action & Risk-Based Pricing – May 22nd:
RouteOne will be providing dealers and industry attendees an overview on the legal landscape surrounding both Adverse Action and Risk-Based Pricing and instructions on how to best utilize RouteOne to manage compliance.
The webinar is scheduled for May 22nd at 1PM EDT. To register for this event or to see a list of other FREE webinars provided by RouteOne, please visit the URL below.
www.routeone.com/freewebinar
Remember the days when it seemed like many dealerships didn’t pay attention to Adverse Action? In the past, dealers thought that banks would ‘take care of it.’ Today, dealers recognize that Adverse Action is their responsibility.
Due to popular demand, RouteOne will be presenting an Adverse Action webinar. While this webinar will not provide dealers any legal advice, it will feature a broad overview on the law, the required actions, and the RouteOne product solutions that can help keep your dealership in compliance.
Member(s) of RouteOne’s Legal Team will speak on Tuesday, August 14th, 2012 at 1:00pm EST. If you, like many dealerships, find the current regulatory environment surrounding Adverse Action to be confusing, I would strongly encourage you and your colleagues to participate in this webinar.
To register, please visit www.routeone.com/freewebinar
In addition, RouteOne will be offering two more webinars on:
- Security and Your Dealership, September 11th, 2012, 1pm EST
- Compliance: 2012 Summary and What Lies Ahead for 2013, November 13th, 2012, 1pm EST
If you guessed ‘Identity Theft,’ you’re correct! The Federal Trade Commission has reported that identity theft has been ranked as the number one consumer-related crime in the United States for the past twelve years. My experience serving dealerships has made me privy to countless horror stories about dealerships being tricked by fraudulent customers posing under the identity of someone else. This activity can end up costing dealers thousands of dollars.
However, thanks to innovative technology, dealers are able to fight back. One dealership used their electronic identity verification tool to identify a fraudulent customer who used a deceased person’s social security number while attempting to purchase a vehicle. The dealer alerted the compliance director, who then contacted local law enforcement. Within minutes, law enforcement arrived and apprehended the suspect, who was part of an identity theft ring in the local market.
Does your dealership utilize any tools that can verify and authenticate your customer’s identity? If not, please contact RouteOne for a demonstration of our ‘IDOne ’identity verification product, which also includes an Office of Foreign Asset Control (OFAC) check. Many RouteOne dealerships use IDOne as their number one form of defense against identity theft. We encourage you to try it as well!
https://www.routeone.net/marketingmessage/docs/R1_IDOne.pdf
http://www.examiner.com/article/identity-theft-fastest-growing-crime-america
http://wardsauto.com/news-amp-analysis/auto-dealership-systems-vulnerable-hack-attacks
By: Jim Radogna
The new federal regulations that went into effect in 2011 have added to the never-ending compliance requirements that dealerships must contend with. Fortunately, most dealers have found that the Risk Based Pricing Notice and updated Privacy Notice requirements are pretty easy to handle. Utilizing the Credit Score Disclosure exception to Risk Based Pricing Notices and using the New Model Privacy Notices is relatively simple – just a few more forms to add to the pile. The Red Flags Rule is another story.
Red Flags regulations require a dealership to not only be a good citizen, but to be a cop as well. There’s no two ways about it, if red flags are detected during a credit transaction, certain proactive steps are required that will create extra work and slow down the deal process.
Many dealerships are utilizing automated Red Flags programs to help stay in compliance with the new regulations. These programs, such as those available through RouteOne, are excellent and certainly make it easier to navigate the Red Flags Rule. However, there’s some due diligence required on the part of dealership personnel when potential “Red Flags” are detected by these systems. Unfortunately, this is not an uncommon occurrence. Fraud or active duty alerts on credit bureaus, address discrepancies, multiple recent inquiries, or multiple new accounts recently opened are just a few of the situations that are considered to be identity theft “Red Flags”.
During compliance reviews recently, we’ve been paying particular attention to how dealership employees are handling the new Red Flags requirements. Not surprisingly, we’re finding that in many instances when red flags are detected during a transaction, staff members are struggling with what to do next.
For instance, we’ve found a number of situations where the red flags program has prompted that a “high risk has been detected” and that “out of wallet questions are required”, but the questions have not been asked of the customer. While it can certainly be uncomfortable to ask a customer personal questions or request that they supply additional proof of identity or address, it is important that these steps not be avoided. If an identity theft does occur, and the system-recommended steps were not taken, it’s conceivable that the dealership’s exposure to liability will be increased dramatically. The same holds true in a situation where the dealer’s Red Flags procedures are audited by a regulator. Staff members’ proclamations that they had a ‘gut feeling’ that the customers were who they said they were will not likely be enough to satisfy the investigators. The fact that the employees were prompted to follow a particular procedure and failed to do so would almost certainly make matters much worse.
Training is a mandatory requirement of the FTC’s Red Flags Rule. Employees should be well-trained in all aspects of the company’s Identity Theft Protection Program and features of any automated Red Flags systems, including the proper procedures necessary if Red Flags are detected. The training should explain the spirit of the law as well. It is important that staff members understand that the Red Flags Rule requires employees to be proactive in attempting to prevent identity theft and that any shortcuts taken in the process can create extreme liability to the dealership.
Even the best Red Flags program is not infallible. Chances are that an experienced identity thief will succeed despite a dealership’s best efforts. That’s understandable. As long as the company can show that they have performed their due diligence and did not take any shortcuts, their exposure will likely be lessened dramatically.
Jim Radogna is the President of Dealer Compliance Consultants, Inc., a national training and consulting firm based in San Diego, California. Before founding Dealer Compliance Consultants, Jim developed a strong background in dealership operations, having spent over 15 years in dealership management. His experience includes working in diversified roles such as sales manager, F&I director, general manager, and training director. In addition, he served as compliance officer for a large auto group, where he developed and integrated a comprehensive compliance program. Being well-versed in all aspects of dealership operations, Jim has used his knowledge and industry experience to develop unique, no-nonsense compliance and reputation management solutions for automobile dealerships of all sizes. These programs are designed to not only protect dealerships from liability, but also greatly enhance the company’s reputation, increase profitability through consistent processes, and increase customer satisfaction and retention.
RouteOne is offering dealers FREE training on the new Compliance Dashboard functionality within RouteOne. We are offering daily webinars through Thursday, 2/23. Register today!
RouteOne Compliance Dashboard Webinar (2:00 p.m. EST)
The RouteOne Customer Support Team will lead the trainings on 2/28, 3/1, 3/6, 3/8, 3/13, 3/15, and 3/20. The RouteOne team will help you:
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Establish an understanding of actions that may be taken in the RouteOne Compliance Tab
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Set up system preferences in the RouteOne system
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Complete an action within the system in regards to:
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Identity Verification
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OFAC
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Risk-Based Pricing Rule – Credit Score Disclosure Notices
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Dodd-Frank Adverse Action Notices
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Run Compliance Reports within RouteOne
To reserve your spot, please visit www.routeone.com/DashboardTraining.
Questions? Contact RouteOne Customer Support at 866.933.0663 or customersupport@routeone.com.
During NADA 2012, hundreds of dealers and dealership employees visited the RouteOne booth to catch a demo of the new RouteOne Compliance Dashboard. The Compliance Dashboard will be available to dealers in mid-February 2012. This free tool allows a dealer the ability to visually evaluate their compliance status within RouteOne, including assessment of Identity Verification, OFAC, Risk-Based Pricing / Credit Score Disclosure Notices, and Adverse Action Notices.
Dealers may view transactions at a dealership or individual user level, and may customize the categories they wish to track and monitor.
Compliance is a significant issue within the dealer community, and many dealers expressed concern regarding the growing complexity of rules and regulations within the F&I office, particularly how challenging it can be to manage compliance duties within the dealership. RouteOne was pleased to demonstrate to dealers its comprehensive compliance suite, designed to assist with managing compliance and staying ahead of government regulations. In addition to the Compliance Dashboard, RouteOne offers identity verification, electronic document storage, Adverse Action/Credit Score Disclosure notices, and more.
Dealers interested in personalized training on the Dashboard or other RouteOne features may contact their Business Development Manager or RouteOne Customer Support at 866.933.0663.
Phishing
Phishing is a form of social engineering. Phishing attacks use email to solicit personal information by appearing to come from a trustworthy company or organization. For example, an attacker may send an email that appears to be from a major credit card company, financial institution, or someone you know. The email will often ask the user for personal information such as user ID and password or provide a link to a bogus website (which appears to be a valid website) asking for the same information. Phishing attacks may appear to come from other entities that take advantages of the following:
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Natural disasters (e.g., Hurricane Katrina, Indonesian tsunami)
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Epidemics and health scares such as H1N1
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Economic concerns, IRS scams or bank failures
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Major political elections
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Holidays
Precautions to take
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NEVER provide anyone your user-ID and password, for any reason; RouteOne will never ask for this information, updates to the RouteOne website are accomplished through our software releases.
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Do not give out employee or other information from unsolicited phone calls or emails. Verify where the caller is from and, ask for a name and phone number. Research the company and validate the person's employers. Valudate the phone number.
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Never provide personal information or information regarding the company’s network unless you are certain that the person should have the information.
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Never provide personal or financial information in an email or by clicking on a link.
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Never click on a link in an email. Pay close attention to the URL; most will use a variation in spelling or a different domain (e.g., .com vs .net or .co vs .com).
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Install and maintain anti-virus software, firewalls, and email filters to reduce some of the phishing emails.
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Never leave confidential information in view of the general public. If you leave your desk, put papers in a locked cabinet and lock your computer.
If you think that you might have revealed sensitive information about the organization or the employees, report it to the appropriate person within your organization. Immediately change all passwords for each logon account. Consider reporting the event to the police and file a report with the Federal Trade Commission (http://www.ftc.gov/).
Social engineering
Social engineering is generally a hacker’s clever manipulation of the natural human tendency to trust. The hacker’s goal is to obtain information that will allow him/her to gain unauthorized access to a valued system and the information that resides on that system. It is also used to gain access to a physical area where confidential information is kept in paper form.
Security is all about trust. Trust in protection and authenticity. Social engineering preys upon the natural human willingness to trust and accept someone at his or her word; this leaves many of us vulnerable to attack and is generally agreed upon as the weakest link in the security chain.
If you think that you might have revealed sensitive information about the organization or the employees, report it to the appropriate person within your organization. Immediately change all passwords for each logon account. Consider reporting the event to the police and file a report with the Federal Trade Commission (http://www.ftc.gov/).
RouteOne will host two informative and educational webinars in December. Please join us December 6, 2011 for the first in this webinar series, focusing on bank fraud. Dealers and Finance Sources welcome.
The Realities of Bank Fraud: What a Dealer Needs to Know presented by Gil VanOver of gvo3 and RouteOne
Bank fraud at automotive dealerships has become a serious issue. From straw purchases to power booking, falsifying down payments to falsifying information on credit applications, these forbidden practices can jeopardize the health of your dealership.
Please join RouteOne and Gil Van Over, President and Founder of gvo3 & Associates, as we discuss the implications of bank fraud in the auto industry. Gvo3 & Associates specializes in developing and implementing compliance strategies within the F&I and Sales departments of automotive dealerships.
Gil will explain the four types of dealership bank fraud and its impact on a dealership. He will also share real-life examples of dealerships around the country that have experienced bank fraud firsthand. Finally, Gil will share best practices you can implement to help prevent bank fraud from occurring in your dealership.
After Gil’s presentation, RouteOne will offer a short presentation on security features and tools that may be used to help prevent fraud and theft within the dealership. We look forward to your attendance. Don’t miss out on this valuable session – register today
By Chuck Gucwa, VP Business Development
Increasing CSI while complying with industry regulations
The automotive lending community continues to be subject to increased regulatory scrutiny and enforcement, and there are no signs of this slowing in the near future. It’s the responsibility of every dealership to ensure their compliance with the laws – or risk expensive fines, penalties and increased analysis and inspection from the regulatory community.
Though these guidelines may require additional effort, time and resources on the part of dealerships to ensure compliance, there is an upside. These laws are designed for consumer protection – and that’s a message you need to be providing to your automotive customers. Look at it as a way to improve customer service while potentially growing your business and increasing profits in an ever changing market.
Navigating the credit maze with your customers
Much of the current regulation, including Credit Score Disclosure notices and Adverse Action notices, relate to the significance of a customer’s credit score in obtaining the most desired financing rates available. While an Adverse Action notice is used to notify consumers when they have been denied credit, a Risk Based Pricing notice is required for those that do receive credit, but on material terms that are less favorable than the terms offered to a substantial portion of customers (or, in the alternative, a Credit Score Disclosure notice may be provided to all customers). Either way, presenting these documents to the consumer offers you the chance to further extend the customer relationship by offering to discuss the customer’s score with them. Many consumers have questions about how their credit score affects their purchasing power. Embrace the chance to assist them with their questions and offer input on how to improve their score (especially with subprime buyers). You may want to develop a road map of sorts for improving credit scores, or providing industry references on the topic. Your customer may take your advice and return in the coming months to make their vehicle purchase with you – establishing their loyalty and hopefully, setting the stage for a long-lasting relationship with your dealership.
The identity crisis
Another high profile regulation is the Federal Trade Commission’s “Red Flag Rule”, which requires dealerships to implement and follow a written identity theft prevention program. This rule serves to protect you and your customers from potential identity theft resulting in loss of property and profits. Additionally, OFAC (Office of Foreign Assets Control) assists dealerships in screening customers to detect potential security threats. Explain these regulations to your customers, particularly when executing the steps within your identity verification program. Reassure them that the appropriate cautionary steps are being taken to protect both you and the customer from potential fraud.
Additional protection
Reassure your customers that you take cautionary steps within the dealership – steps not mandated by government agencies – to ensure the safety and security of customer data. Electronic document storage of all credit application materials and related information (credit reports, privacy notices, etc.) eliminates hard copy storage and the potential for lost or stolen documents at the dealership. Simple but effective policies such as a ‘clean desk ’and ‘acceptable use’ policy go a long way in protecting confidential and sensitive consumer data.
Take the opportunity to explain to your customers that you are there to assist them, and that you want them to obtain the best financing possible in the safest environment possible. This is your chance to establish long-term loyalty and customer retention at your dealership. Good selling!
Charles Gucwa is the Vice President of Business Development for RouteOne LLC, a free web-based credit application management system that connects automotive dealers to their subscribed lenders within a single portal. More information can be found at www.routeone.com or by calling RouteOne Customer Support at 866.933.0663.