Most everyone in the automotive industry is well aware of the increased attention and focus the CFPB, FTC, and other state and federal organizations have placed on the industry over the past several years.
We’ve seen the FTC’s Safeguard Rule revision go into effect in June 2023. The rule, which was designed to protect sensitive personal data, was revised to expand the definition of a financial institution and included added provisions regarding how to develop and implement specific aspects of an information security program. Some of these provisions include data encryption, multi-factor authentication, and secure disposal of information, as well as the requirement of companies to designate a specific, qualified individual to manage it.
We’ve seen state legislation proposed and enacted on a multitude of topics affecting the automotive and finance industries. We’ve seen the CFPB issue bulletins regarding wrongful repossessions, add-on products, event algorithmic bias in credit decisions and then proceed to take legal action against banks, auto dealers, and finance companies.
Certainly, it is not always easy to navigate all the rules, orders, and bulletins that make up the regulatory landscape. Dealers often need to rely on legal counsel, compliance officers, and specialized software solutions to help them manage and track regulatory requirements. Staying informed about changes in laws and regulations and maintaining a commitment to ethical business practices is essential for the long-term success of their businesses. Partnering with trusted service providers can also be a key to success and an additional resource for dealers to rely on.
PassTime, a leading provider of GPS asset tracking solutions has been in business for over 30 years, and has been a leading voice on compliance in the automotive industry. Part of the reason the company remains a leader in automotive telematics is because of its commitment to compliance, live client and customer support, rigorous client training, and a nationwide installation network. PassTime’s adherence to best practices across the board ensures customers have the tools and resources they need to meet their goals while staying in compliance.
Here are some tips to help you stay in compliance with one aspect of your business: GPS devices.
The “Do’s”
- Create written policies and procedures for the use of GPS devices.
- Fully disclose the installed device to the consumer as a condition of financing.
- Provide written disclosure to the end-user consumer of an installed SID/GPS device as a condition of the credit extension under the RISC.
- Have the consumer sign the disclosure.
- Quickly resolve and track complaints related to the device.
- Use trained and/or certified in-house, third-party, or vendor-supplied installers.
The “Don’ts”
- Do not pass on the cost of devices (including service costs or installation) to consumers.
- Do not discriminate in any way regarding who you require to have a device and who you don’t, as this could violate federal and state anti-discrimination laws.
- Do not disable a customer’s vehicle without giving prior warning.
- Do not leave the vehicle disabled after a customer makes an appropriate payment.
- Do not use GPS tracking for any improper purposes, which could include excessive tracking, or tracking without a specific and valid reason, such as a loan default.
When it comes to staying compliant as a dealer or finance company, it takes a lot of work to understand and keep up with all the rules and regulations. One source of help may come from service providers themselves, and their ability to inform customers about things to pay attention to. Ask them for their best practices and how to create an effective GPS usage policy.
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