Free Compliance Quiz

Correct answer: yes! 

Technology is needed to catch fraud. Fraud is on the rise in all industries, but especially in automotive sales.

The emergence of generative AI has only supercharged this problem, with fraudsters able to create fake IDs and clone voices at a faster pace than ever.

Click here to see our fraud detection technology that has (so far!) prevented $312 million in vehicle losses for dealers!

Correct answer: no! 

It’s tempting and easy to just snap a photo of someone’s driver’s license on your phone, but you’re violating the FTC Safeguards administrative obligation to handle customer data safely and reliably. 

It is imperative that you use a secure method to obtain STIPS and all NPI data from customers that needs to be collected, created, stored. Whether the car is rolled or not, whether the customers in the dealer or not—find a way to securely collect and store anything that you need from the client without them having to be present and make sure that it doesn’t float through the hands of a sales representative where they can get it on their phone or get it in their email.

If the customer is the victim of identity fraud or you have an ex-employee with malicious intent, having that customer information opens you up as a dealer up to an even bigger liability.

Our compliance software has a mobile app that enforces compliant transmission and storage of all customer NPI data. It’s easy to use, totally digital, and (most importantly) guarantees a transparent, consistent, and compliant process by enforcing guardrails on your salespeople’s behavior on every vehicle sale.

Correct answer: no! 

It’s very likely you could walk into a dealership, pretty much anywhere in the country, and find NPI sitting somewhere, whether it’s on a desk, on top of a copy machine, or elsewhere. A lot of time sales reps can justify by saying something to the tune of “well, they’re on a test drive, and don’t worry, it’s only there for a minute.”

But think about everything that’s in a deal jacket: a copy of a driver’s license, a signed credit app that has the customer’s signature and their social security number and their income.

That is everything a fraudster needs to really ruin somebody’s life, for a good long while. The showroom is a chaotic place, and this vulnerability should be a risk that dealers really shouldn’t want to take.

To lower your risk and be compliant, put in a digital showroom compliance solution like ours. Our compliance software gives you the ability to put your showroom on autopilot and remove  paperwork from your sales process. Having a paperless showroom with deal jackets in a digital format so they can be reviewed, signed, and collected digitally drastically reduces your liability and makes life easier for sales reps, because they can eliminate the back-and-forth between the customer and desk and sell cars faster!

Correct answer: yes!

Most dealers should be very aware of what it takes to pull credit in a compliant way.

If you need to pull credit on a client, you need to:

• obtain permissible purpose.
• require a government ID.
• receive a signed credit application.
• issue a privacy notice.

To meet federal regulations, you need:

• to run an OFAC search to make sure that person isn’t a sponsor of terrorism.
• risk-based pricing notices signed, because every hard pull is considered a hard offer of credit from the dealership.

And, along with this process, you need to make sure that you respond to and clear red flag alerts as they come up. And, if this becomes a dead deal, you’ll need to send out an adverse action letter.

There’s a lot to do when it comes to credit-based compliance! Luckily, we offer credit compliance solutions that check all the boxes for you to ensure you’re FTC and FCRA compliant on every deal. 

Correct answer: yes!

Most dealers are following the credit-based compliance steps outlined in the previous answer—but, a lot of the time, these steps are cleaned up after the fact.

Plenty of finance managers get to the end of the week and haven’t been doing credit compliance at the exact time of the deal. So, many dealers will get to Friday, realize they need to clear red flags to get paid, and start just clearing all of them.

If it’s an innocent enough flag like a mismatched address, that’s fine, but what happens if you find out someone’s used a deceased Social Security Number to apply for credit? Or if there’s bigger problems that can’t get fixed on a Friday evening before you clock out?

Too many dealers know all the right steps to credit-related compliance, and even will do the right steps to achieve this compliance—but it’s often not at the right time and place for every deal.

That’s why you need technology like our credit report and credit compliance solutions in place. These allow you to actually police and enforce this credit-based compliance to ensure:

• that OFAC is pulled at the right time on every deal.
• that red flags are cleared in line with the proper process on every
• that we have that risk-based pricing notice in the folder on every deal.

This is all going to dramatically reduce your credit-based compliance risk. Implementing tech like ours not only makes sure these steps are done and you can train to the correct deal sequence, but you can report on it and know in real time, instead of playing catch-up and clean-up after the fact.

Correct answer: throughout the sales process!

There is absolutely a place in our compliance for post-transaction and deal jacket audits. That is a best practice; it’s been that way for a long time; and it shouldn’t change.

So, for the dealers who are doing transaction-based audits, you’re not doing it wrong! An audit is wonderful, but trying to put toothpaste back in the tube three months down the road after you’ve been regularly out of compliance on hundreds of deals doesn’t help us.

We want to be compliant now. So, in addition to these after-the-fact audits, you need to have a way to police and enforce a compliant sales process throughout that sales process in real time, as it’s happening, whether that’s through technology or through checks and balances.

You’re going to be better protected and the reason for that is very simple: we are all human and part of being human is that we mess up, right? The challenge with dealers messing up, though, is that everybody on your showroom floor is inundated with deals, leads, phone calls, everything is coming at them at every point of the day. And the higher up you go in a dealership, the more chaotic it gets.

 In the naturally chaotic environment of a dealership—the reality is if you have a way to put dealership sales compliance software in place that guarantees a transparent, consistent and compliant process on every vehicle sale.

Our tech allows dealers to enforce compliance throughout your sales process in real time, day in and day out on every deal, whether it’s slow on a Tuesday or busy on a Saturday, you’re going to put yourself in a much better position to make sure those audits are awesome every single time.

And, when dealers can knock out an audit, you’re a hero! You can make sure you’re the hero every time with Informativ’s technology—by eliminating paperwork, preventing fraud, and enforcing consistent compliance during the sales process, so you’re not only relying on post-transaction audits.

Correct answer: yes!

If you answered “no”—you’re at risk! Improper storage of consumer information is a major (and common!) compliance violation for dealers. 

Dealerships are very good at storing their sold deals—but you’re also required, according to FTC guidelines, to store dead deals, deals that have not been bought, for five years. And, in that file, you need:

• permissible purpose
• permission to pull credit
• a government ID
• a signed credit application
• proof that you issued a privacy notice.

This isn’t just simply checking a box for the FTC either. Storing dead deals for the mandatory period, and longer, is a very important element to protecting your business from lawsuits.

For example, what happens if a customer tries to pull a fast one two years down the road and comes back to your dealership with an attorney and says: “I never gave you permission to pull my credit.” There are attorneys out there right now that are exploiting this gap in a lot of dealerships’ practices. The question you have to ask yourself is: could your dealership produce that proof two, three, five years down the road? If the answer is no and you can’t, not only are you out of compliance, but you’re at risk for a very costly lawsuit.

Not having that data easily accessible gives those attorney permission to come in and do more discovery and throw around scary words like class action and unethical business practices.

If you can store those dead deals in a digital format and make it so that they can be automatically stored—that really guarantees that everything’s good to go. That’s why big dealers like Kunes Auto Groups love our Total Solution. Informativ’s Total Solution gives their 34 dealerships a simple and streamlined way to enforce showroom compliance on every step of their sales-to-F&I process—including the storage of thousands of dead deals for the FTC required five years!

Correct answer: yes!

It seems like we’re hearing more and more stories about data breaches at dealerships that are compromising customer data, causing reputational harm, really slowing down sales, and just generally make your life harder.

As in all the answers above, develop showroom compliance guardrails throughout the sales process and implement proactive tech that enforces compliance every step of the way. But you also need a plan for when those systems and your process might fail. Anticipating scenarios where your data might be breached or compromised, and planning accordingly, will save you from a massive headache down the line.

.

Correct answer: yes!

A very big way that you can proactively prevent data breaches and “nip them in the bud” is by having maximum visibility into who and how data is being accessed.

Our dealership sales compliance software locks down who can make changes to consumer data in your CRM or the DMS, enforce new user-based permissions, and keeps a digital record of who and what has been edited on a record. Our tech’s locked-down, high-visibility approach to data and who has access to it protects you and your customers!

Correct answer: yes!

Training is temporary; turnover is a fact of life. With 145 different pages of regulations—some of which are very, very specific, and a lot of which are unfortunately very vague—compliance is hard and complicated, so expect friendly fire!

Salespeople in the showroom have quotas to meet and many of them are reckless in getting to “yes” from a customer. Enforcing compliance from your staff is hard—but it essential for being a top-performing dealership.

Informativ’s technology enables you to enforce this consistent compliant process throughout your dealership—even between multiple rooftops!

Just listen to this testimonial from Chris Suchy, the General Manager for Nielsen Automotive Group:

“Ever since we’ve implemented, we have a seamless process with our employees. They come in, they’re trained. They know how we do everything. It’s paperless. We don’t have any inconsistencies anymore. With several stores, we can even take an employee from one store, move them to another store, and it’s a seamless transition.”

This is the value of investing in showroom technology that is turnover proof. You can always be certain that your process is consistently compliant—no matter who is selling in your showroom!