Dealers are becoming more dependent on the internet. Security threats are of critical importance for dealerships nation wide. Every Internet connection, whether it is a bank, an apartment complex, a house, or a dealership, is identified only by an IP address. Attacks are indiscriminate and usually “automated”; in actuality, targeted assaults are actually very rare.

All dealerships collect personal information from their customers; such as names, addresses, credit card numbers, credit histories, and Social Security numbers. GLBA requires dealerships as a financial institution to ensure the security and confidentiality of this type of information. The Safeguards Rule applies, regardless of size, to those businesses who are “significantly engaged” in providing financial services to their customers.

The FTC has tried to make the standards as flexible as possible when referring to the dealer’s size and complexity of their information systems. As a reference to information systems the FTC uses the National Institute of Standards and Technology (NIST) when enforcing compliance among government and financial institutions. The current NIST standards for protection of electronic data include not only a firewall, but a firewall that can detect, and respond to, intrusions into the network.

“Continually monitoring threats through intrusion detection system (IDS) and other mechanisms is essential” (Executive Summary NIST 800-61 Computer Security Handling Guide Pages ES-1)

Visit http://niada.com/PDFs/Publications/Safeguards%20Rule.pdf page 7-8.

The Car Counselor’s TARP 2.0 event is this Friday, December 3rd at Columbus Fair Auto Auction. The event will feature Keith Whann detailing his meetings on Capitol Hill, including the FTC and the Department of Defense. The vendor list includes companies that have never participated in an NIADA event; so new to the independent market, but certainly not new to the industry. This event will focus on recent legislation, the affect on your business and technology solutions to advantage your dealership.

Here is the answer to your question:

When the Manufacturer’s Warranty still exists on the vehicle you are offering for sale, check the WARRANTY box and place this exact language in the SYSTEMS COVERED / DURATION section:

“MANUFACTURERS WARRANTY STILL APPLIES. The manufacturer’s original warranty has not expired on the vehicle. Consult the manufacturer’s warranty booklet for details as to warranty coverage, service location, etc.”

Thanks again for the question!

L.J. Marhefka
L.J. King and Associates

The IRS has announced that it will suspend examining auto dealership issues related to Internal Revenue Code (IRC) Section 263A until it publishes additional guidance. Dealerships generally are subject to the uniform capitalization (UNICAP) rules of IRC Section 263A. As a result, dealerships must include in inventory costs the direct and indirect costs that are properly allocable to property that is inventory.

In a technical advice memo (TAM) on Sept. 7, 2007, the IRS rejected a dealership’s method of capitalizing additional Section 263A costs. The IRS classified Section 263A issues as Tier III issues – risks posing the highest compliance risk for a specific industry – because taxpayer noncompliance is perceived to be high. The IRS announced in October 2009 that it was suspending examination of Section 263A issues for dealerships effective Sept. 15, 2009, through Dec. 31, 2010. The suspension was to encourage compliance and give dealerships a chance to voluntarily change their method of accounting to comply with the regulations outlined in Section 263A.

The IRS is now considering publishing additional guidance related to Section 263A dealership issues. It is expected that the guidance will address many of the issues outlined in the TAM and will provide a practical application for auto dealerships. The IRS has said it will extend the existing audit suspension period until it publishes the additional pending guidance.

The Wall Street Journal is reporting that Sen. Christopher Dodd and Rep. Barney Frank are at odds over who should lead the Consumer Financial Protection Bureau.

Frank, the House Financial Services Committee chairman, has joined his party’s liberal base in pushing for Harvard Law Prof. Elizabeth Warren to head the bureau, and wants her named without delay. Dodd, the Senate banking chairman, questions whether Ms. Warren could get the 60 votes needed for confirmation. He appears to be waging a one-man campaign to persuade the White House to nominate anybody else.

Even if Warren could be confirmed, a heated battle over her in the Senate would likely delay the new agency’s writing of new financial rules, something Dodd wants to avoid. READ MORE…

Website Advertising Disclosures:  What’s Required Is Good For Your Business

Dear Keith:  I was reading one of your posts on Auttr.com and learned that whenever I advertise, any and all material limitations or exclusions must be disclosed in a clear and conspicuous fashion.  Can you give me a few pointers as to what this might mean on my website?

Sure thing.  Putting this into practice on your website, consider try the following:

Place disclosures near, and wherever possible, on the same screen as the claim.

Use text or visual cues to prompt disclosure review.

With hyperlink use, make the link obvious.

Include complete disclosures on click thru pages.

Make disclosures on banner ads or the page to which the banner ad links.

Repeat disclosures on lengthy ads.

It does not matter if your target is dealership compliance, increased dealership profitability and customer satisfaction or developing new lender relationships – your dealership paperwork is key!

The term “debt collector” includes any person who uses interstate commerce or the mail in any business, the principal purpose of which is the collection of debts. Remember also that under the Fair Debt Collection Practices Act:  1) Courts apply a least sophisticated consumer standard to analyze protections under the Act;  2) the Act provides for explicit consumer rights including the right to have the debt verified and 3) FTC rules prohibit creditors from using confessions of judgment, and from requiring the debtor to waive any protections they are entitled to under the law.

Enforceability of an Arbitration Agreement depends upon the jurisdiction you are located in and how the Agreement is drafted.  There are many factors to consider, but here are a few of the major ones:  Are there one-sided provisions?  Are the costs to the consumer excessive?  Which parties claims are covered and are they mutual and consistent?  What are the rules for the arbitration proceeding?  Notice to the consumer that certain rights to file suit or participate in a class action are waived.

So, you want to emphasize the importance of compliance to your dealership employees, but it’s hard to explain.  If you need a little help with your message, try this:  When explaining compliance, it has to be more than just a word.  Tell them your goal is to have your dealership’s paperwork, policies, practices and procedures all in accordance with the law.  They must recognize that compliance is an ongoing process that must be monitored, updated and managed.  Lastly, to be effective, your people, paperwork and automated systems must work together.