Picture the
following conversation at a dealership:
"Hey Boss. I got an idea. You've been saying that our
Service Department revenue is off a bit, and that you'd
really like to increase it because we don't really make any
money on new car sales, and the F&I guys aren't pulling
their weight. Let's buy a list of folks who own the make of
cars we sell, then mail them a notice that their cars have
been recalled. What do you mean, I'm fired? Well, if you
don't like it, I'll take it to the dealer down the street."
Couldn't happen, right? No dealer would be dumb enough to
launch a fake recall program just for the purpose of getting
more customers for the service department. Would they? Would
they?
They would. We don't make this stuff up - we aren't that
good at fiction writing.
But a dealer, and a large dealer at that, was recently
nailed by his state Attorney General for allegedly faking a
recall notice to boost service revenues. The reason I'm
bringing this up is to point out that all the advice we have
been giving you over the years regarding your sales
department applies equally to your service department.
If you've been following our advice, you've done your
homework, and you have scoped out all of the state and
federal advertising requirements that apply to you. You have
checked with your state ADA or IADA to see what they have by
way of advertising guidance. You have checked with your
state's motor vehicle dealer regulators, consumer protection
agencies and Attorney General to see what aids they might
have concerning advertising, and you have designated someone
in your dealership to check the web sites of all of these
folks regularly. You have reviewed all of the materials on
the Federal Trade Commission's web site. You have a file for
each advertising campaign that you have run, and the file
contains a checklist of state and federal advertising
requirements. Your dealership's compliance officer signs off
on each ad you run, thereby taking responsibility for it.
When your people in charge of advertising are not certain
they are doing things correctly, you have a lawyer that they
can go to for clarification and advice, and you've provided
a budget for that legal review (remember, no budget means no
compliance). You have provided ethics and compliance
training for whoever is in charge of advertising.
But mainly, you have infused your organization from top to
bottom with a spirit of straightforward dealings with your
customers. You have made it clear that lying, cheating and
stealing from your customers, your finance sources and your
suppliers will simply not be tolerated. You, and your ads,
always tell the truth.
OK, if you are doing all of that, you are in pretty good
shape. The one thing that you might not be doing, however,
is making sure that your service department folks are firmly
in this loop. They will be signing up for promotional
programs offered by various vendors and may be coming up
with their own programs. These promotions are subject to
many of the same restrictions and limitations that apply to
your sales programs. Make sure that your training,
compliance and review structures are broad enough to pick
them up too.
You don't want to go to all that trouble and expense? I
really don't care - you'll look good in that orange
jumpsuit.
Thomas B. Hudson, Esq. is the author of:
CARLAW®
http://zieglersupersystems.com/carlaw1.htm
A Southern attorney delivers HUMOROUS PRACTICAL LEGAL ADVICE
on car sales and financing!
He is also the Editor/author of:
The CARLAW® F&I Legal Desk Book
http://zieglersupersystems.com/carlaw2.htm
The Answer Book for Finance and Insurance Professionals
Spot Delivery®
a monthly legal newsletter for auto dealers, and the Editor
in Chief of CARLAW®, a monthly report of legal developments
in all states for the auto finance and leasing industry (not
to be confused with the book).
He is also a partner in the Maryland office of Hudson Cook,
LLP. Spot Delivery, CARLAW and the books are produced by
CounselorLibrary.com LLC, For information, call 410-865-5411
or visit:
http://CounselorLibrary.com
Copyright 2007. CounselorLibrary.com, LLC, all rights
reserved.
This article appeared in Spot Delivery®. Reprinted with
express permission from CounselorLibrary.com, LLC.
Thomas B. Hudson, Esq. can be reached at:
[email protected]
Advanced Praise for CARLAW®...
"CARLAW® is a treasure trove of information, insight,
experience and common sense. There is no other collection of
its kind. It's a 'must read' for all Dealers, General
Managers and Comptrollers. I refer to my copy on a constant
basis; in fact, I keep it on my desk."
Adam Goldfein Host of Syndicated Talk Show AutoScoop - The
Inside to Car Buying
Advanced Praise for CARLAW® F&I Legal Desk Book...
"This new book may be called a 'guide' but it's more likely
a 'bible' for every dealer, F & I manager, and trainer in
the country. A timely and invaluable reference that covers
all legal and regulatory touch-points in a dealership's
purchase transaction by a consumer. AFIP's endorsement
confirms that the stable of authors know the 'rights' to
follow and the 'wrongs' to avoid. It is on the recommended
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