Exploring Future Trends in Retail Automotive Compliance

What lies ahead for retail automotive compliance?

At the NADA Show 2024, Demetrios Lahiri had the opportunity to sit down with compliance experts James Ganther, Scott Clay, and Gil Van Over III to delve into the latest compliance trends shaping the automotive landscape. Here's a glimpse into the insightful discussions and key takeaways.

Regulatory Reboots

The conversation kicked off with a discussion on regulatory reboots, particularly focusing on the FTC's CARS Rule. Despite its current status on hold, dealerships are advised to stay vigilant and prepare for potential changes in advertising, training, and contractual practices. Scott Clay emphasized the Rule's intentions, aiming to provide a level playing field for dealers to market their offerings while mitigating issues caused by non-compliant practices among a few "bad apples" in the industry.

Tech Takes the Wheel

Another significant trend highlighted by the experts is the increasing role of technology in reshaping retail automotive compliance. The industry is experiencing rapid digitization, with traditional paper-based processes being phased out in favor of advanced digital systems. Gil Van Over pointed out that the presence of pen and paper in dealership operations often signals underlying compliance issues. Leveraging digital solutions not only enhances transparency and efficiency but also streamlines compliance efforts, ensuring adherence to regulatory requirements in an increasingly complex landscape.

Left to Right: Demetrios Lahiri, Scott Clay, James Ganther, and Gil Van Over III discuss trends in automotive industry.

Trends in Retail Automotive Compliance

As the automotive industry continues to evolve, staying abreast of these emerging compliance trends is paramount for dealerships striving to uphold ethical standards, foster consumer trust, and navigate regulatory complexities effectively. By embracing technological advancements and remaining proactive in anticipating regulatory changes, industry players can position themselves for success in an ever-changing marketplace.

Are you looking for a partner in your dealership's compliance journey? Click below to learn more about all that Mosaic Compliance Services has to offer.

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The FTC's Safeguards Rule Amendment is Coming

Watch John Zwerneman, VP of Sales at Mosaic Compliance Services, break down the upcoming Safeguards Rule amendment and its potential impact on dealerships.

What's New in the Safeguards Amendment?

The upcoming Safeguards Rule amendment is set to take effect in May 2024. Here's what you need to know to stay ahead of the curve:

Understanding the Update

The Federal Trade Commission (FTC) is rolling out an amendment to the Safeguards Rule to enhance data security regulations. This amendment represents a proactive step towards enforcing data protection measures more effectively and at scale.

Key Points for Dealerships

1. Mandatory Breach Reporting: Under the updated Safeguards Rule, dealerships must report specific types of data breaches to the FTC.

2. "Naughty List" Implications: Dealerships that experience reported breaches could find themselves on a public "naughty list," potentially tarnishing their business reputation.

The Importance of Compliance

In today's data-driven world, compliance is not just a box to check; it's a cornerstone of maintaining customer trust and upholding business integrity. Avoiding the "naughty list" is paramount for preserving your dealership's reputation and ensuring continued success.

How Mosaic Can Help

At Mosaic Compliance Services, we understand the complexities of regulatory compliance and the unique challenges facing dealerships. Our team of experts is dedicated to helping you navigate the Safeguards Rule amendment with confidence. Here's how we can assist:

• Identifying and Addressing Vulnerabilities: We conduct comprehensive assessments to pinpoint potential data security vulnerabilities within your dealership's operations.

• Implementing Robust Compliance Measures: From developing tailored compliance strategies to implementing robust safeguards, we provide customized solutions to fortify your data protection framework.

• Ongoing Support and Training: Our commitment to your success extends beyond mere compliance. We offer ongoing support and training to empower your team with the knowledge and skills needed to maintain compliance vigilance.

Don't Wait Until May!

With the Safeguards Rule amendment looming on the horizon, now is the time to take proactive steps to ensure your dealership is prepared. Please don't wait until it's too late to safeguard your business and reputation. Contact Mosaic Compliance Services today to kickstart your journey towards Safeguards Rule compliance.

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Breaking Down the FTC CARS Rule

The retail automotive industry has been buzzing with discussions surrounding the Federal Trade Commission's (FTC) revised CARS Rule.

Scott Clay, Esq., VP & General Counsel at Mosaic Compliance Services, recently offered a concise breakdown of the main components of the FTC CARS Rule.

Key Components to the CARS Rule

Below is a breakdown of key aspects of the CARS Rule that could soon affect the retail automotive industry:

• Prohibited Misrepresentations: The CARS Rule prohibits 16 specific misrepresentations.

• Required Disclosures: Mandates clear communication of an Offering Price.

• Ban on Non-Beneficial Add-Ons: Imposes a ban on non-beneficial add-ons.

• Express, Informed Consent: An affirmative act that communicates a consumer's unambiguous agreement to be charged

• Enhanced Recordkeeping: Additional documentation requirements including documentation of employee training.

Prohibited Misrepresentations:

One of the significant facets of the revised CARS Rule is the prohibition of 16 specific misrepresentations, posing potential penalties for non-compliance. This gives the FTC the ability to seek immediate penalties against dealers for violation of these misrepresentations

Required Disclosures:

Perhaps the most notable change is the introduction of an "Offering Price," mandating clear communication of the true purchase price. This directive seeks to eradicate deceptive practices often concealed behind asterisks and fine print.

Ban on Non-Beneficial Add-Ons:

The CARS Rule imposes a ban on non-beneficial add-ons. Add-ons that convey no benefit to the consumer are illegal under this Rule. Additionally, dealers can not sell any item to a customer without first attaining their "Express, Informed Consent."

Enhanced Recordkeeping:

The CARS Rule advocates for enhanced recordkeeping practices, imposing a two-year mandate to ensure compliance with the rule and associated training requirements.

What Dealers Should Do:

In light of the evolving regulatory landscape, it is imperative for dealerships to stay informed about developments pertaining to the CARS Rule. While the rule is currently stayed, there remains a possibility of it becoming enforceable in the future.

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