You should not do business with a customer until you are certain they are not on the SDN List. You need to run OFAC on all deals, not just cash. To help protect yourself further, keep a record of OFAC checks for five years.

Potential Fines: Criminal $250k + JAIL per each individual violation; Civil $89k per each individual violation*

*As of 2022 and subject to alteration depending on the circumstances of violations. Please seek legal counsel for verification and further details.

Asking out-of-wallet questions is a great way to verify the identity of any buyer you might have concerns about.

Adverse action notices are a dealership’s responsibility as a loan originator or an indirect lender. If an applicant is approved for credit but a deal did not go through – you must send the applicant a notice.

Potential Fine: $46,000 per violation.*

*As of 2022 and subject to alteration depending on the circumstances of violations. Please seek legal counsel for verification and further details.

A consumer’s signature on an digital signature pad linked to an electronic document or their signature on a tablet has the same legal effect as an ink signature on a paper document.

Dealerships are required to give a customer a Risk-Based Pricing notice every time they look at the customer’s credit bureau and the customer is financing the vehicle, and it the notice must be provided before the contract is signed.

Potential Fine: $4,000 per individual violation.*

*As of 2022 and subject to alteration depending on the circumstances of violations. Please seek legal counsel for verification and further details.

A written Identity Theft Prevention Program (ITPP) is required to detect, prevent and mitigate identity theft. There are 26 potential red flags that need to be considered in your dealerships’ ITPP.

Potential Fine: As high as $4k per each individual violation*

*As of 2022 and subject to alteration depending on the circumstances of violations. Please seek legal counsel for verification and further details.

Having a compliance policy is required. Without a defined compliance policy implemented at your dealership, there is plenty of room for mishaps to occur, ultimately leaving you vulnerable to fraud, fines, audits, and even legal action.

Independent dealerships are required by law to follow the same FTC practices as any other auto dealership. They are also subject to the same penalties.

Though it’s newly required to appoint a “qualified individual” to oversee, implement and enforce the information security program and submit an annual written report to the board of directors or governing body, it’s still all managers’ responsibility to uphold compliance policies.

The dealer should always complete the form and include it in the deal jacket for all sales, regardless of whether the Final Dealer Participation Rate equals the Standard Dealer Participation Rate.

To stay protected, your dealership needs to store documents for all deals—including dead deals. The duration of storage will depend on the state that in which you operate.

To protect itself, your dealership needs to store all deal documents for the state-mandated period. The required storage length is dependent on the state(s) in which you operate and the type of deal. When properly stored, those documents can also be your best protection against audits and lawsuits.