Volume 1, Issue 1 October 2007 |
DEMOLITION DERBY COMPLIANCE BULLETIN
|
Allow me to introduce myself and my company. My name is Lee Woodward. I am the Compliance Director for Dealership Development, a profit solutions and compliance company with an 18-year track record in the automotive industry. We will be publishing a quarterly newsletter to keep you up to date on the current state of compliance as it relates to the automotive industry. We have also created a compliance "hot line" where you can contact me by phone or e-mail to ask questions or offer opinions on compliance issues that involve your business. My contact information can be found at the end of this article. Let's begin. I recently attended a conference on the current and future state of compliance as it relates to the business of selling automobiles. There is an old saying: "What you don't know can't hurt you." Well, I would propose that saying is obsolete in the litigious environment we are in and under the new laws or new interpretation of current laws in this country today. The Federal and State laws that you as a car dealer are subject to grows by the minute. I would venture to guess that some of you subscribe to the old saying above. It is your choice as a business owner to do so; however, if you want to keep the profits from your day-to-day operations in your pocket and not "donate" them to some government agency or morally deficient class action attorney then you may want to open your eyes and ears and admit that you can improve your compliance program. I would like to direct your attention to an article recently written by Emily Marlow Beck for counselor Library that is attached for your reading pleasure or displeasure as it may be. If I may summarize, a dealer broke the law and violated customers' rights. The Attorney General took notice. The Attorney General wants the law-violating dealer to pay restitution to those customer harmed and, in addition, pay a civil penalty. It couldn't get any worse, could it? Wrong again. The Attorney General doesn't feel that it is punishment enough to make the dealers write a check for potentially six figures plus. No sir! What the Attorney General wants is for the dealer's license to be revoked and to prohibit the dealer from ever selling cars again in this state. Ever!! Guess which state this is happening in? ILLINOIS!!!!!
|
At this same conference there was a speaker who was a former federal prosecutor. Why was he a former federal prosecutor? In his own words he quit because it no longer mattered if a case should be brought against a dealer but, rather, if a case could be brought. In other words right and wrong no longer mattered. If you haven't noticed, Federal Prosecutors are using criminal law to regulate business more and more. Why? Because they get bigger news headlines and it is also a cheaper way to prosecute you. One important point I think to make at this juncture is that the Federal Prosecutors work for the Federal Government. Last time I checked these are the people that print money. They have the ability and resources to litigate with you down to your last dollar if they or you so choose. Along these same lines the rumor mill is producing a chilling tale of the FBI targeting instances of Bank Fraud, you know, fraudulent credit applications, power booking, straw purchases and falsified down payments. Why this is so chilling is because according tot he rumors the FBI is training agents to come after you, the automobile dealer. How? Mystery shoppers or possibly the next employee you hire may just be an FBI undercover agent. When can you expect the sleepless nights to begin? Mark your calendar for the year 2009. The FBI is rumored to target three to five dealers in each state. What do I mean by "target?" How does the FBI raiding your dealership sound to you? What do you think that will do for you in hitting your monthly sales goal? Do you think they will pronounce your name correctly on the evening news? In one undercover sting operation in a dealership in North Carolina the FBI took five years' worth of files. Is it time to pursue another career? Probably, if you subscribe to the "what you don't know can't hurt you" philosophy. because today not only can it hurt you, but it can put you out of business. How hard and long have you worked to get where you are today?
|
Keep in mind that our current Attorney General has placed a target on your back. Keep in mind that the most successful class action attorney in the country calls Chicago his home. Keep in mind that Federal Prosecutors would love to see your name in print. Keep in mind that you can say that it will never happen to you until it does, and then you sit back helplessly as your bank account bleeds as you pay restitution and penalties. And let's not forget your own legal counsel. If a class action lawsuit is brought against you and you need your attorney to save your butt, are you in a position to question his or her fees? I think the situation is best described as getting it "coming and going." What is a dealer to do? Stop being reactive with your compliance program and get PROACTIVE! I am going to end this obituary with four questions. Three of these questions are likely to be asked by a prosecutor who is trying to determine if your compliance program qualifies for the not-so-free field trip on the short bus to the courtroom of no choice. What policies do you have? Does your compliance officer conduct on going training and exposure audits and is all of his or her work documented? What have you invested in your compliance program? What would your answers be? If you have any questions about the topics in this newsletter or you would like some assistance with your compliance program, please contact me at lwoodward@ddidsi.com or call me at (847) 840-673. Also, if you would like a no obligation compliance audit, contact me. In our next newsletter we will be discussing Adverse Action notices and the revisions to your dealership's responsibilities in notifying your customers; also, the critical and important differences between negligent actions and willful actions and how they could mean the difference between guilty or innocent. COVER YOUR ASSETS COMPLIANCE HOTLINE 847-840-6738 Send us your e-mail address and we will e-mail our quarterly compliance newsletter to you at no charge! lwoodward@ddidsi.com |