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Compliance Initiatives That Help Sell Product. Gilbert L Van Over III, U.B.A. September 12, 2012. My Lawyer Made Me Do This. Nothing stated by or written from gvo3 & Associates , its employees or agents is intended to be legal advice nor should it be construed as legal
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Compliance Initiatives That Help Sell Product Gilbert L Van Over III, U.B.A. September 12, 2012
My Lawyer Made Me Do This Nothing stated by or written from gvo3 & Associates, its employees or agents is intended to be legal advice nor should it be construed as legal advice. All legal questions should be raised with your attorney. September 12, 2012
Expert Witness Payment packing Best rate Negative equity Reg M disclosures Falsified income Bait & Switch Credit inquiries Backdating Best rate Improper repossession Safeguarding information Identity Theft Bank Fraud Straw purchase False down payment False income Power booking RICO Deceptive practices Blanking contracts TILA disclosures Spot delivery Straw purchases Payment packing Stuffing Etch Bank Fraud Rescission FTC Used Car Rule Etch disclosure September 12, 2012
Strike The Right Balance Profit$ & Compliance are not mutually exclusive September 12, 2012
Great Wall September 12, 2012
Auto Dealership Perceptions of Likelihood of Risk of Prosecution
There are certain moments in life when you know that the pain will soon begin…
What Has Your AG Published? September 12, 2012
Hungry Media September 12, 2012
Why Are Dealers Under Attack? • 1940 GM Conditional Sales Contract • Contract and title was extent of deal file September 12, 2012
You – Compliance Cop? September 12, 2012
Exploding Compliance Issues Disparate Impact September 12, 2012
Disparate Impact • Focus on product sales in F&I, not reserve • Write every deal at the buy rate, or • Have a standard yield spread premium and stick to it • Pay plan = no commission for reserve September 12, 2012
Exploding Compliance Issues Deceptive $ales Practices September 12, 2012
Unfair and Deceptive PracticesStatute Definition Unfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful. September 12, 2012
Unfair and Deceptive PracticesPractical Definition If it appears confusing, it is probably deceptive September 12, 2012
IssuePayment Packing September 12, 2012
Payment PackingRegulator’s Perspective Resolution National Association of Attorneys General “Payment packing is the deceptive practice of misrepresenting monthly payments to consumers during auto sales and lease negotiation in order to facilitate the sale of automobile related products and services.” September 12, 2012
Desking • OK to include products in payment quotes • Must have a consistent methodology • Helps avoid payment packing, discriminatory pricing, disparate impact September 12, 2012
IssueInadequate Product Sales Documentation September 12, 2012
SolutionProper Menu Execution September 12, 2012
SolutionMenu Four-Square • Memorialize Vehicle Sale • Purchase price • Down payment, trade, rebate • Amount financed • Term • APR • Base payment • Disclosures • Products are optional • Can be purchased separately • Not required to obtain financing • Does not affect interest rate • Customer signature next to base and final payments • Paper Trail • Products selected on menu consistent with products purchased • Premiums consistent on menu, RISC, EF • APR must be consistent between menu and RISC • Periodically validate base payments • New menu on recontract • Sell Products • Every available product offered to every customer • Disclose product price • Disclose new monthly payment • Can show multiple term options • One of term options must be consistent as base payment term September 12, 2012
Exploding Compliance Issues Identity Theft September 12, 2012
Or here September 12, 2012
gvo3 & Associates www.gvo3.com (312) 961-9065 gil@gvo3.com