2018 GNYADA Membership Directory

2. Know your state’s law on the amount of “doc fees” a dealer can collect, and if the law permits such a fee, but does not prescribe a specific amount, be sure you can reasonably defend your “doc fees” in relation to your cost of preparing documents and titling work for vehicles you sell. Many states permit “reasonable”doc fees but do not give any guidance on what constitutes “reasonable”for this purpose. 3. Establish a consumer complaint resolution process and include timelines for a quick and efficient resolution. Keep track of your complaints and note any trends. For example, if a number of consumers complain that they did not know they were being charged for an aftermarket product, consider improving your communication strategies so that consumers only purchase the products they intend. Where disputes cannot be resolved through complaint resolution, try to establish an informal mediation process with your consumers either with a neutral officer at the dealership or through a local association such as your regional auto dealer association or a mediation company. Many problems can be resolved by an effective mediator prior to litigation or arbitration if the dealer and customer are at an impasse. A consumer complaint process is an integral element of a Compliance Management System. Consult your local attorney on the possible use of arbitration clauses and class action waivers if mediation or informal efforts to resolve disputes are unavailing. Arbitration and class action waivers are discussed in Chapter 10: Arbitration and Mediation. 4. Have an attorney or compliance professional conduct periodic compliance audits and “mystery shopping” at your dealership to identify areas that might support UDAP violations. Remember that in many states a violation of any federal consumer protection law or regulation (e.g., failing to publish a Spanish-language Used Car Guide on a used vehicle that was negotiated for sale in Spanish or failure to provide an adverse action notice) is an automatic violation of a state’s UDAP laws. Promptly correct any deficiencies identified using appropriate staff training to avoid repetition or other conduct that may lend itself to being an unfair or deceptive trade practice. Remember to live by your dealership’s code of conduct and train your employees frequently. Additional Resources A summary of the evolution of the FTC’s rules on unfair acts and practices: www.federalreserve.gov/ boarddocs/supmanual/cch/ftca.pdf A summary of the FTC’s views on the standard for deceptive acts or practices under Section 5 of the FTC Act: www.fdic.gov/regulations/compliance/manual/7/VII-1.1.pdf Code of Federal Regulations: Using the word “free”in advertising: www.law.cornell.edu/cfr/text/16/251.1 The FTC’s summary of the Used Car Buyer’s Rule: www.business.ftc.gov/documents/bus13-dealers-guide- used-car-rule A list of free FTC compliance publications: www.consumerfraudreporting.org/pubs_business.htm A New Hampshire state document that in Part II describes in detail the workings of New Hampshire’s UDAP law: doj.nh.gov/consumer/sourcebook/1st-word.htm The CFPB’s consumer complaint hotline: www.consumerfinance.gov/complaint

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