GNYADA May 2018 Newsletter

Posting Labor Rates 9

diagnostics and another for repair time. Remember, this rule applies only to posted signs. Estimates and invoices must contain specific information about the labor rate charge and calculation as well as specifically listing labor and parts. If a dealer gives an estimate based on a flat-rate manual, they must provide the name of the manual used.

“Phishing” emails, where cyber- criminals use a fake identity to coax employees into sharing information or transferring money, are becoming increasingly common. While phishing may seem easy to spot, the practice can be quite manipulative and clever so dealers need to be aware. Consider this scenario: while a dealer principal is on vacation, a finance employee receives an urgent email. It appears to be from the dealer principal, as it’s from their email address, contains authentic information regarding the trip, and addresses the employee by name. “I need your help. I need you to wire $20,000 into this account right now. I trust you can handle this for me. Please keep this between you and me for now, and I’ll explain on Tuesday.” This message looks legitimate, so the employee acts quickly. Once the transfer occurs, however, that money is lost forever. The dealership just became the victim of an email fraud. Dealers can, but do not have to, post what they charge for labor. However, New York’s Motor Vehicle Repair Shop regulations require that dealers post signs explaining how labor rates are calculated. Shops can calculate labor rates using clock hours and/or flat-rate manuals. Either or both can be used to reflect work being done on one vehicle. Posting only the calculation allows repair shops the freedom to charge different rates based on how hard the job is or what type. For example, a shop could charge one rate for

For free labor rate signs, call GNYADA at 718.746.5900.

When Something Smells Phishy: Steer Clear of Fraud 10

Fraudsters are looking to spot weaknesses in a dealership, and these weaknesses could be employees’ lack of understanding of cyber fraud. In order to prevent phishing, it’s important to assess risks and educate your employees about common signs of trouble. While cybersecurity may seem overwhelming, taking small steps can prevent major losses. GNYADA thanks John Kratsch, (john.r.kratsch@baml.com, 862.485.4467) Dealer Financial Services Relationship Manager, Bank of America Merrill Lynch, for this article. This communication is for educational purposes only.

The nature of the business makes auto dealerships particularly vulnerable: Dealerships handle a lot of money – Fraudsters aim to intercept one of the larger transactions or access bank account information. Many dealerships operate like small businesses – Although dealerships handle a lot of inventory, they often have a close, family-like office culture. Because staff is small, there is a lot of trust in one another when handling important information. Dealerships often don’t have the same control processes as larger companies. Wire transfers – Because you can’t transfer the ownership of a vehicle without a title, most vehicle transfers are conducted via a wire transfer or treasurer’s check, two common targets for fraudsters. n n n

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • May 2018 7