Article

Duty Calls

GSM offers pointed advice for selecting your compliance officer and putting them to work.

August 2015, Auto Dealer Today - Feature

by Jason Heard

Government agencies and blaring headlines have pushed compliance to the forefront of our industry. Dealers feel they are sacrificing profitability and focus because of the constant attention to all the seemingly trivial details they have to monitor. Regardless of how any of us feel, this is the world we now live in. So what should we do?

A growing number of dealers has found that the best solution is to appoint a compliance officer — someone whose job it is to help make sure all the “i”s are dotted and the “t”s are crossed. So let’s take a look at some of the day-to-day duties this person will handle and build a profile for the ideal candidate.

Day-to-Day Duties

The duties of a dealership compliance officer can be divided into four basic categories:

  1. Keep information secure. Any and all of your customers’ personally identifiable information — including credit applications and copies of driver’s licenses and credit applications — need to be kept secure from prying eyes and outright theft. Violations can cost you up to $10,000 apiece, so your compliance officer needs to help design and implement a plan for securing those documents.
  2. Apply FTC stickers. When pre-owned vehicles are displayed without warranty stickers, Federal Trade Commission (FTC) fines could soon follow. Compliance officers should make it a habit to walk the lot, check for the stickers and make sure they stay fresh and visible. Failing to do so can cost you $16,000 for every missing sticker.
  3. Fortify the finance office. We could spend a lot of time talking about what we already know. For now, we’ll keep it simple: menus in every deal, full disclosures and no payment packing. Also, these offices need to stay closed and locked when there is nobody in them.
  4. Don’t forget HR. Most dealers don’t think of human resources when they think of compliance, but a hostile work environment is just as big of an issue as Red Flags. Your compliance officer should be well-versed in OSHA and FMLA, among other initialisms.

The Ideal Candidate

Considering all the items listed above, it’s clear your compliance officer will have a lot of work to do. So who, exactly, should get the gig? Most dealers, unwilling to add another non-income-producing employee, will add these duties to the job description of an existing manager or staff member.

Allow me to challenge that thought. Look at it this way: We sell insurance products in the finance office to help protect our customers from the “just-in-case” issues in life. Are they valuable products? Absolutely! We have a duty to help customers protect their investments. Well, audits are the “just-in-case” scenario your compliance officer will be tasked with preparing you for.

When selecting the ideal candidate, here are a few items to keep in mind:

  1. They need to work for the owner. Compliance needs to start at the highest levels. After all, owners are the ones who answer questions during audits, and they foot the bill for violations.
  2. They need to focus on compliance. Adding “compliance officer” to the title of a sales manager or another employee with a full plate could very well be a mistake. Full- or part-time, the job requires laserlike focus.
  3. They should be duty- and process-driven. Your compliance officer should feel a sense of duty to the owner and work to protect them. They need to implement, follow and teach processes, and they can’t be easily detoured.

Compliance is never a fun subject, but it can’t be taken lightly. Ignoring these issues will do nothing to make your business better; in fact, it can put you in jeopardy. This is the new normal. So get to work on finding your compliance officer today.     

Jason Heard is the general sales manager at Gerald Jones Honda in Martinez, Ga., He is a 20-year industry veteran with extensive sales and sales management experience. [email protected]

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