Latest Regulations in Your State

Terrence O’Loughlin: Thank you for coming this morning. We really appreciate you being here and we appreciate you being here, to the Terry--or the, I should say, the Bob and Terry show. This is Mr. Robert Harkins, whom I've known for what, 25 years at least? He's quite an experienced fellow in the automobile world. He's done all kinds of things.

Robert Harkins: Quite a bit older than him is what he's trying to say.

TO: Precisely, yes. I learned everything I know from him. So he's going to begin and then I will reintroduce myself, and talk about a few things. So Bob, please.

RH: Thank you very much. Good morning, everyone. Thank you all for joining us, not that you had any choice in the matter, although I guess you really did. Again, my name, as Terry said, is Bob Harkins. I'm with American Guardian Warranty Services, that's the American Guardian group of companies, now part of the Reynolds team and very pleased to be a part of that. And looking forward, as Terry and I have done many times around the country, is to chat with you really about what many people think is the number one hot button topic in our industry today. And that would be compliance and ethics. Compliance and ethics, F&I and the law, selling with integrity, and the need really for every dealership in America. And ladies and gentlemen, it doesn't matter whether you're RV, marine, power sports, commercial trucking, or auto, to develop what's referred to as an in-house effective and ongoing compliance and ethics program, now commonly referred to as a CMS or compliance management system. So Terry, with slides in a few minutes, is going to get involved with the latest regulations in your state, but I wanted to chat with you really about what's going on in the industry as it relates to some of the compliance issues. And as we do that, please remember from a disclaimer standpoint that I'm not an attorney. I certainly don't pretend to be. So nothing that I say, give, or show you this morning is in any way intended as legal advice. It's simply to help you look at, evaluate, and if necessary--come on in, come on down--improve the overall effectiveness of your business policies, your business practices. Obviously, consult with your attorneys, your house counsel, regarding the legality of any policy or procedures that you would ultimately change or adopt. The blue folder, if you open that up, and we got to kind of press for time with this, there are actually nine handouts on the inside. There are five on the right-hand side and four on the left and we'll take the time to go through maybe three or four of those in just a few minutes. But again, I want to chat with you about things that you might use if you're in the store, or the dealer of the management team, whatever, and share with you that we want to present things to you from three very credible organizations. And that will be providing you with information--good morning, good morning--providing you with information from NADA, that would be NADA legal and NADA management education, that's number one. Number two is information from the law firm of Hudson Cook. Hudson Cook. And that would be CARLAW, the F&I Legal Desk Book. And last but not least, information from our good friend Gil Van Over and his book, Automotive Compliance in a Digital World. Let's start with CARLAW, the F&I Legal Desk Book. I hold in my hand the ninth edition of CARLAW published by the law firm of Hudson Cook. This publication was in the last quarter of 2021. It's now up to 21 chapters. The author’s our founding partner, Tom Hudson. Now he's what, partner emeritus? I guess would be the right title, and 20 other attorneys from CARLAW that put this together. It's 21 chapters but they kind of renumbered them, but they added a new chapter and the new chapter is actually chapter 18. It's one of the most important chapters in the book and chapter 18 is the Americans with Disabilities Act and websites. The Americans with Disabilities Act and websites. So if you get this from CARLAW I would go to right to chapter 18. It's written by Hudson Cook attorney Erica Kramer and she talks about 10 things about the Americans with Disabilities Act and websites. And the fact that a dealer, new, pre-owned, whatever, RV, marine, power sports, commercial trucking, auto, we’re subject to the Americans with Disabilities Act because we're a public accommodation, and the Department of Justice has also ruled that our websites are subject to the Americans with Disabilities Act as well. Penalties, private right of action, a customer can make against the store, against the dealership. But even worse than that from a federal standpoint, the regulating agency goes directly to the DOJ, the Department of Justice. So if it goes to the Department of Justice, the minimum fine--the minimum fine--for the first violation is $50,000, and subsequent fines after that are up to $100,000 and that's PV, per violation. So we just wanted to mention to you that new chapter, chapter 18: The Americans with Disabilities Act and websites. Don, how are you, sir? That's all right. That's all right. And then really quickly, just a couple of things about this as it relates to the introduction to F&I compliance, and this would be chapter one again written by Tom Hudson and several of the other attorneys. And what they really get into is the fact that dealers today, more than ever before, are really facing a hostile environment. He talks about, on pages seven and eight, nine major threats. And we'll just mention the first five nine major threats dealers face. Number one would be class action lawsuits. Class action lawsuits can take a dealership out of the game forever. That's number one. Number two he mentions after class action lawsuits are big verdict non-class lawsuits. Big verdict non-class lawsuits and he talks about that the goal there is to punish the dealer severely enough to maybe take them out of the game. Number three and number four are the FTC, Federal Trade Commission, and number four is the CFPB, the Consumer Financial Protection Bureau. And last but not least would be the state attorney general or the attorneys general in every state. And he reminds us from a political standpoint that automobile dealers are favorites of AGs in most states. And that the reason for that is there are many more voters, or customers, out there if you get my drift, than there are car dealers. So they go after us from an industry standpoint. Staying with however that introduction, let's talk for just a minute about class action lawsuits. And Hudson Cook lists the three primary reasons for class action lawsuits. Number one is discrimination. Number two is payment packing. And number three is lack of proper disclosure and what that really means in most cases--I hold in my hand. I live in Texas, this is the Texas Reynolds retail installment sale contract we use for training purposes. People don't know how to disclose a retail installment sale contract. When it gets to eContracting, it's really a mess. People don't know how to disclose a retail installment sale contract. But staying with that first part, relating to discrimination and what that has to do with the fact that for years now with the cases that we've seen with the AGs, the Attorney General, the FTC: African Americans, Asian Americans, and Hispanics are paying higher APRs than white customers with similar credit profiles. If you were in the business, oh December of 2013, January ’14, whatever - you might remember that during that date, that profile, the Department of Justice, the DOJ, and the CFPB announced the largest auto loan discrimination settlement in US history. The dollar amount? $98 million. Who was the defendant? Ally Bank, Ally Financial. And rapid fire succession after they hit Ally, American Honda Finance for $24 million. Right after that, Fifth Third Bank--$21.9 million. And right after that was TMCC Toyota Motor Credit Corporation--$21.2 million. Again the same thing: engaging in an ongoing nationwide pattern or practice of discrimination against African Americans, Asian Americans, and Hispanics. And it's not going away. The last three actions just the past year and a half to two years with the FTC involving Bronx Honda action, involving the Napleton Auto Group in four states, the 15th largest leader group in America, and then last year, most recently Passport Automotive Group in DC and Maryland involved exactly the same thing. So it's discrimination not just with setting rates but also African Americans, Asian Americans, and Hispanics are paying higher APRs than white customers with similar credit profiles. Now there's an answer to this madness. There really is. And this answer has been around for a long time and here it is: the two NADA programs. NADA’s Fair Credit Compliance Policy and Program and also NADA's Voluntary Protection Products Model Dealership Policy. The NADA Fair Credit Compliance Program and all these resources were written by Paul Metrey, many of you know that name. Paul now is a senior vice president of Regulatory Affairs for NADA and the idea is with this you set a standard dealership participation rate in the store and every customer gets that rate above the buy rate. Here's the page that goes with that. A standard dealership participation rate that every customer gets. So for example, maybe I'm a dealer and I decide to go with a one-point spread. What that means is if the buy rate is six, my customer rate would be seven. If the buyer rate is seven, my customer rate would be eight. And so on through the deal. Now, I can never go up above that seven or eight, depending upon the spread that I choose but the great news is there are seven allowable reasons. Seven allowable reasons that a dealer can choose to drop the rate to meet the rate that the customer wants or is demanding to attain or retain the business. The great news ladies and gentlemen about that is that all seven of these reasons to drop the rate, believe it or not, they've all been approved by the Department of Justice. So why wouldn't you want to do this? Terry O’Loughlin will speak to this a little bit later but also our friend from NADA, Paul Metrey, the last number that I had from him that the number of dealerships in America, not dealers but dealerships, that are actually using this is in the high 40%. High 40%. And that was about six or eight months ago when I talked to him directly. Think about that though. 17,000 dealerships plus maybe 40% are on this program. This has been around since 2014. Now the newer one is the Model Dealership Policy for Voluntary Protection Products. Terry and his team put this together in 2019. And what this is, is a similar page where a dealership sets a standard retail price for every product. A standard retail price for every product. Repeat: standard retail price for every product. You never go up but with this program, there are five allowable reasons--five allowable reasons recommended by NADA that I can drop that price to meet what the customers’ demands are. So these two programs really provide what we refer to and we know these two programs provide the dealers if they will use it with compelling defenses, compelling defenses for regulator investigations. Compelling defenses for regulator investigations. Terry will say later I'm sure that these two programs should be standards in every dealership. These two programs should be standards in every store. So that's a little bit on discrimination. Payment packing. You know, in 1999, going back to that, that's when the Attorney General at the time from the state of Washington, Christine Gregoire-- you know, AG not only stands for attorney general but many times it also stands for aspiring governor. They get their name in front of the voters, whatever. She became the governor of Oregon and her assistant when she was the AG, Douglas Walsh, went after dealers, and product providers. I was with Ryan at the time, they nailed us really well. Technology vendors, suppliers, whatever. And that was 1999 and 2000. Then I learned from Terry. Terry and I go back a lot of years, okay? Before he joined Reynolds as their director of compliance in 2006. I've known him since, what, 1998 and doing things like this together. But what they really did is--I love the acronym NAAG—N-A-A-G. Stands for the National Association of Attorneys General. The National Association of Attorneys General. And in 1999 they defined payment packing and denounced it. And here's the NAAG definition of payment packing. Payment packing is the deceptive practice--payment packing is the deceptive practice of misrepresenting monthly payments to consumers during auto sales and lease negotiations in order to facilitate the sale of F&I products and services. That's the NAAG definition of payment packing. And then the great news about that as far as the payment packing and dealing with customers whatever and many of our stores around the country are Reynolds clients. They're working with docuPAD, whatever, and they’re really doing it the right way and have the opportunity to really engage, educate, and empower the customer because one of the things that they do when it comes to successful menu selling they follow information from our good friend Gil Van Over. Also a great piece for your training library: Automotive Compliance in a Digital World. This was written in 2018. It's my kind of book, it's small. It's my kind of book that the print is large. And it's 18 chapters. And I see on here and tell me if this is true, it says “foreword by Terrence O’Loughlin J.D., M.B.A.” Is that true?

TO: That's true. That's very true. I wrote the foreword for the book.

RH: Terrence O’Loughlin J.D., M.B.A. What a great job he did with this. However, if you get this and I don't know what Gil charges for this, maybe $49-$50, whatever, but there are five chapters in here that I will tell you are worth their weight in gold. Chapters 9, 10, and 11. I call them the “E” chapters. Chapter nine is eDesking. Chapter 10 is eMenu. Chapter 11 is eContracting. Chapter nine: eDesking. Chapter 10: eMenu. Chapter 11: eContracting. Worth its weight in gold. And then chapter six is a great one. We use this in our stores around the country and the dealer reads it whatever. The title of chapter 6 is Kinks Will Be Kinks. Kinks Will Be Kinks. And Gil talks about, and his company gvo3 and Associates, it's an auditing, trading, consulting group. He will provide litigation support for dealers who are charged with certain things if he's done work in the store and they want his help. But Kinks Will Be Kinks. He talks about the fact that when his team does deal audits, and deal jackets, they actually look at and audit 85 different items. I was just reading something from Gil the other day when this new FTC trade regulation rule becomes effective, we're told that's going to be the last quarter of this year he says that's going to add at least another 10 things and maybe even 20 that he's going to have to add to his audit list. So that thing could be over a hundred that they audit in a deal jacket. But here's the key folks. He says when they get together and have the final wrap-up with the dealer, the compliance officer, the attorney many times whatever. He says the problems that they are having, always fall into one of three categories. Think about this. They always fall into one of three categories. And those three categories are naïve, sloppy, and kinky. They always fall into one of three categories. Naïve, sloppy, and kinky. And he says 100% of the time, 100% of the time, with the right people, dealer commitment, management support, whatever we can fix naive and sloppy. He then says also 100% of the time you can't fix kink. You can't fix kink. The only way to fix kink is to terminate them from your organization. And in the same chapter a few paragraphs down, he says, you know, maybe six months later I think it was he's doing an audit at another store in the same part of town, same location, and the kink that was dusted at the previous store, guess where he's working now? The dealership that he's now doing his audit. You know what he's doing? The exact same things. You can't fix kink. And then another chapter, chapter 14, really quickly. It's a great chapter because it gets into really a review of the--not just red flags, but a little bit on safeguards rules as well. And it's called out-of-area deliveries. He gives five key guidelines for out-of-area deliveries as it relates to the red flags rule. Because remember, the red flags rule says to a dealer and a dealership, you have to clear all red flags. You have to clear all red flags before you open a covered account. And ladies and gentlemen, the definition of a covered account is a retail installment sale contract or lease agreement. You have to clear all red flags. He does a great job with that. So I would encourage you to get this, Automotive Compliance in a Digital World, and also from the law firm of Hudson Cook, CARLAW. Twenty-one chapters. The subtitle, by the way, is 373 Things to Know about Auto Dealer Finance. What that means is, among these 21 chapters there are 373 questions that they answer. For example, the chapter on truth in lending is 24 Things Every Dealer Should Know About the Truth in Lending Act and Reg Z. Then he gets into Consumer Leasing Act and Regulation M. It's 23 Things Every Dealer Should Know About the Truth in Lending Act. Then he gets into the Equal Credit Opportunity Act--23 things. And then farther in down in Chapter 13 is the big chapter it's 32 things, 32 Things Every Dealer Should Know About the Money Laundering Statutes and the IRS Cash Reporting Rule. I will tell you, they don't know it. I was in stores just a week before last. Our clients, our accounts. The dealer has 21 stores. Just bought three new ones in Tennessee and Kentucky and they were having problems with IRS form 8300s, the statement to be provided to the customer, and one of the things that they were doing over the years and I run into this a lot, they forget that you have to do an 8300 when the dollar amount is more than $10,000 in cash. That means $10,000 and a penny. Well, they were doing an even $10,000 and firing it off to the IRS. The problem is you don't have to do this. This came back a number of years ago to haunt one of our dealers in North Carolina. I'm not a golfer. I used to be, but don't have the back to do it anymore at age 79. A lot of things I can't do right, Terry? Nevertheless, this dealer and his sales manager fell on the sword talking about how they were telling their customers, their friends to take the money back to the bank and redeposit it and bring us a personal check we don't have to report that. Well, the bottom line is they could never remember the $10,000 either. They reported a $10,000 deal subsequent to that the customer was investigated, and was up the road at Raleigh-Durham in the IRS office. IRS investigator pulls this out and says, “Well, it's an even $10,000. They really wouldn't have had to report this. Then I noticed they didn't check the suspicious box,” but he says, “They probably forgot to do that so I'm just going to just go ahead and handle this as a suspicious transaction.” True story. That customer came hot-footing it back to the dealership subject to what happened and informed the dealer that he couldn't believe that both the dealer and his team were so incompetent that they did not know to handle--how to handle the IRS cash reporting rule especially when it comes to reporting the transaction to the IRS. He says, “I will never ever purchase from you again and I will tell this to all of my friends, relatives, neighbors, whatever.” True story. Don't let these kinds of things happen to you. So the three major reasons for the class action lawsuits. Number one - discrimination. Number two is payment packing. And number three is the lack of proper disclosure. It's amazing. And eContracting I don't have time for whatever. But here's a Reynolds contract. April of ’21. Texas. It's now 28 inches long and I remember first getting into training before many of you were born with Pat Ryan & Associates. I went into retail in 1972. Was at a Ford Store in Akron from ‘72 to ‘76 and then joined Ryan in '76 and did a number of things after that. But people today still don't know how to disclose a retail installment contract. But I'll just read one thing off the Reynolds contract for you and it's in every one of your states on your contracts. And down here, in fact, can you help me out, Kasi, if you would? Yeah? Okay. Kasi, the pressure’s on. I’ve got it all underlined for you right here. Kasi, nice and loud right here where it says “You confirm…”

Kasi Edwards: “You confirm that when you signed this contract we gave it to you.”

RH: We what?

KE: We gave it to you.

RH: We what?

KE: We gave it to you.

RH: We gave it to you!

KE: And you were free to take it and review it.

RH: Ladies and gentlemen, stores aren’t doing that. Stores aren’t doing that. They’re doing it the way that I was trained 100 years ago to lay it in front of the customer, go through this mess whatever, and sign here, here, here, and here. That violates Truth in Lending. And that goes back actually to 2003 when Truth in Lending, TILA, changed the way that they have to—that we really have to do it. So I can't give you legal advice. We do a lot of work with AFIP. If Dave Robertson were here he would kind of model it this way. Kasi here's your completed retail installment sale contract in its entirety for your review. I do what? I physically hand it to Kasi. Kasi, take your time with it. No rush. Keep it as long as you like. Kasi, you might begin by checking the information here. Let’s initially make sure that your name, address, city, state, and ZIP code are correct and Kasi I'll certainly be happy to answer or address any questions or concerns you might have as well. Now most people will give it right back to you but if she says nothing, I'm going to come back and say, “Well Kasi, let me ask you: what part of this contract, if any, would you want me to go over with you,” and see what they say. Now if it comes back, we haven't disclosed anything here. I'm now going to lay it in front of the customer and go through the deal. People are watching. Before I yield to Terry I'll just share this story with you last year. And it is—wow. Was working in northeastern Ohio with Agent Partners. This group had 18 stores. We certified 84 people in four sessions in one week. Every session was kicked off by one of their three attorneys. All the attorneys were ladies. They kicked off the deal and they said in part, and this is before the trade regulation rule really came into effect--proposed by the FTC in June. But she told the group, every class, that they decided not to videotape F&I transactions. They were thinking about that, they decided not to do that for a number of different reasons. But here's what she said--or they said--to every class. They said these are F&I people, dealers, general managers, whatever. They said, “You should just that every customer is wearing a wire and taping what you're saying.” You should just assume every customer is wearing that wire. But our commitment to the American Guardian group of companies, American Guardian Warranty Services, my team, the vice president of training at AGWS, our team working with our agent partners and now over 4,000 plus dealer clients in over 40 States and I think four Canadian provinces, our commitment is the same. It’s to help the agent partner and dealer client to maximize deal profit meaning both finance and insurance income. Repeat and referral business. Finance and insurance income, fixed and variable operations. But as always folks to do it the right way. The right way of course it's in a manner that's consistent with good customer relations and sound business practices. So 10:45 is our hour to get you out of here, so now I have a lot more to share with you. These packets I will have over on our table in the pavilion. Inside there are things from the law firm of Hudson Cook, also NADA things as well, as it relates to contract disclosure, and some other sundry items as well. With that, before Terry gets the hook, as I heard them say on Congress the other day at one of these Congressional meetings: I yield back the balance of my time to the Honorable Terry O’Loughlin. Round of applause for Terry!

TO: Thank you. Thank you, Mr. Harkins. Thank you very much. Thank you all once again for being here. I am Terry O’Loughlin and I'm the director of compliance for Reynolds and Reynolds. Been with Reynolds now for 18 years, but prior to that I spent 16 years with the Florida Attorney General's office where I investigated and prosecuted car dealers. So I came out of the darkness into the light as you might say to protect your interests. Went undercover as a finance manager a couple of times. Went undercover many times as a customer and I took many depositions and statements of Car Dealers and all their employees. So I have a few remarks to make. Now, Eddie Cheever had the fastest trip around the Indianapolis 500 - 236 miles per hour. I have 45 slides in 20 minutes so it's going to be kind of like that fast speed. So I'm going to hit the highlights which I hope you understand are--there's a lot of material here that we could delve into further. So, with that said, this presentation is not meant to provide you with legal advice. This is my legal disclaimer. I am an attorney, been an attorney for 40 years. Nothing in fine print is ever good news, as you know. Too fine a print, that's illegal, it's called procedural unconscionability. So, if you have too small print in any document, it's illegal. Okay. Regulators are after you. That--“Woe is me”-- is you, and this is a joke because when I was in the Attorney General's office the idea was there's nothing we could do wrong when we sued car dealers. If we sue car dealers incorrectly we could still get away with it. So this is--I just made this up as a form of levity. The agenda here is the nature of compliance, what is black and gray letter law? Two, the risk of the car business - UDAP, federal agencies, current issues. Third, attorney general prosecutions, there are many, they're not your friends. And finally, some recommendations. So proceeding from there, compliance presentations. It's all delivering unfortunate news to you because it's all about regulations costing you money. How to do business. And they're planning to sue you. When they issue guidance if you don't follow that guidance, you could be sued. It's all about identifying issues for you. It’s about suspenders. What should you be doing to maximize your protections, as Bob made reference to? And your appetite for risk. Some dealers are willing to take the risk. I don't recommend that but that's the balance you have to decide for yourselves. What is black letter and gray letter law? Black letter law is when the law is very clear. Sadly, there's a lot of gray letter law. Unfair and Deceptive Trade Practices Act. It's gray letter. It's not clear. So the burden is placed upon you to try to figure it out. There's risk. It's all about risk. And this is a wonderful booklet that's produced by the NADA and this is the regulatory maze they produce. You're one of the most regulated industries in the country. Car dealers face an enormous stack of laws they have to discharge. It's a tremendous burden. So, you are also number one in consumer complaints. Did you know that? Of all the complaints posed by consumers across the country, you're number one. You've been so for years. This is from 2016. It’s an example. Who's most likely to threaten you? It's the Attorney General by far. Then you have other regulators. Then you have private plaintiffs and class actions. The federal agencies, once they target you, it's big trouble. It's “woe is me” when they target you. Where do cases originate? Consumer complaints--the vast majority of all the problems you're going to have--consumer complaints. Let's think of this gray letter law. Unfair and Deceptive Acts and Practices, UDAP, that's the acronym. Indiana and Ohio, the two states here, both have this act and we're going to get to it in a minute, has the tendency or capacity to mislead a consumer. That's the standard. Think about that. Has the tendency or capacity to mislead a consumer. How many things you do in your stores could be perceived as being a tendency or capacity to mislead a consumer? It's actionable. It places you in the crosshairs of a lawsuit. And I counted up over the years 150 ways in F&I there could be fraud, deceptive trade practices, unfair practices. A whole slew of them out there. And I've talked to, like he mentioned, about payment packing and so forth. All of these acts out there that you should be aware of, cognizant of that your finance managers may be engaging in which could lead to some legal travails, to say the least. The two federal agencies you should be aware of, are the CFPB, the Consumer Financial Protection Bureau, and the Federal Trade Commission. They are targeting dealers routinely. Example - this is Director Chopra, head of the CFPB. Dealer markup is just an undisclosed kickback. Really? So in other words there's a difference between the buy rate and the sell rate, that's a kickback? That's his perspective. I don't agree with it. Then you have Kelly Slaughter who thinks committing a spread between the buyout rate and sell rate is unfettered discretion leading to discrimination. Bob mentioned discrimination. Can you imagine that? That's the perspective federal agencies have of what you do on a routine basis. And the major issues now. This is the slate of them. These are important for you to be--to take notice of. The Trade Regulation Rule. NADA is opposing this but I think it's going to come to fruition. It's going to create a new burden for you. The FTC has come out with the idea of what's a junk fee. Could a dealer preparation fee be a junk fee? Quite conceivably. Third, FTC eliminating spot delivery. I've been discussing that with the legal department of the NADA, and they're quite concerned. So you could have spot deliveries eliminated. How about abusive? What's abusive? Very unclear with that term. That's gray letter law. That could be applied to you. How about discrimination? CFPB using the unfair part of the UDAP statute? Wow. That gray letter concept can be applied to you. And finally, the Dark Patterns, that's an interesting concept we'll get to that in a minute and the Safeguards Rule you all should be complying with the Safeguards Rule at this point. Someone--some dealer that is not compliant is going to end up as a perp walk. They're going to be a perpetrator. They're going to be paraded about failing to observe the law and I'm sure the FTC is working on that now. The Trade Regulation Rule. Misrepresentations, accurate disclosures, expressed informed consent. What does express informed consent mean? That means, like a doctor's office right? You're going to have to have express informed consent for a transaction when you're selling a vehicle. That's what they're planning on. Add-on product, recordkeeping requirements. There are some real burdens in this Trade Regulation Rule, might happen, junk fees… Consumer advocates urge the bureau to protect consumers from junk fees. Could that be deal preparation? Could this deficit include doc fees and there are the ones they’re thinking about now? How about spot delivery? FTC is considering eliminating spot delivery. How many transactions are spot-delivered every day? Without any problem. The vast majority of dealers that engage in spot delivery do so perfectly legitimately. So why are they pursuing this? How about discrimination? There’s unfair conduct. Once again, gray letter law. Unfairness. It means unconscionability. Discrimination, boy they really like going after dealers for unconscionability. Bob mentioned several of those cases, Passport and you think of Bronx Honda, Napleton. Yeah, I mean big cases, millions of dollars. Dark patterns - online advertising could be considered a dark pattern and an unfair and deceptive trade practice. How about the safeguards? You should be complying with that now. If you're not, I would urge you. Because of that--the date is passed for compliance. Enforcement action. Now take note of this case. This is Tate Auto Center, individual liability for violations of the FTC Act. That means the general manager, the sales manager, F&I managers, and anybody associated with the store could be held liable for what's happened to the dealership. Joint and several liability it's called. So they're not stopping at just going after the dealer for errors. They're going after people individually. Your individual pocketbook. Once again, the Bronx Honda discrimination case. Major case, you had--now this is the American Financial Services Association which I serve with, they--that's a trade organization for financial institutions and they keep a record of all of these cases. There are 30 state attorney generals. And there are pages, and pages, and pages, and pages of enforcement. And they’re joint--and if you notice here this is the Napleton case and if you notice here look what's happening--Illinois and FTC. State attorney generals work with federal agencies to prosecute cases against dealers on a routine consistent basis. They meet together, they discuss cases, and they decide what they're going to do. If they target a dealer group or even a small dealer, they will they will join up forces. More of that, more of the same. It goes on and on and on. Now here's--here in Indiana and Todd Rokita, he's come up with some cases that he's working on. Rolling back odometers, doc preparation fees, and things like that. Trade-ins, failure to pay off the trade-in. And he can prosecute all those cases I mentioned. All those 153 possible transactions. All those discriminations--the same thing applies to David Yost in Ohio's “as-is” contract clause, who took action against a used car dealer for odometer tampering. Big, big Volkswagen settlement. Car warranty things. He can prosecute all those cases as well just like any other attorney general, in any other state, because of the wide ambit of the Unfair and Deceptive Trade Practices Act. UDAP. So here are my recommendations. Bob mentioned these. I had the pleasure of participating and drafting these two and I'm a big fan of this. I think every dealership should implement--should have all three of these as part of their library and they should be implementing them. Because your perspective should be, “How can I protect myself? What can I do?” And it’s sad, it’s unfortunate you have to create various walls and various protocols and procedures that add time and effort to your transactions. But once a transaction is over and some unfriendly auditor comes by from the government and starts looking through your files what's going to be there to protect you? Your word or if you have documentation? That's the key. Documentation protects you. That provides that documentation. So you have deal jackets, right? Everyone has deal jackets. Why do you keep extraneous papers in those deal jackets? You should keep only what's necessary. This is some of the best advice I could provide. We're in the document business. I love documents. I dream about documents. But when you have documents in a file, why do you keep things that aren't necessary? They can come back and haunt you. My best cases when I audited files were those two or three or other buyer’s orders that were superseded because they were evidence that “Oh, the deal, the consumer complained he didn't get $8,000 for his trade, he only got $6,000.” Well, the one buyer said he had $8,000 but it was a different car. Why keep those papers in there? Make sure you keep the papers you should keep but get rid of the rest. Respond to consumer complaints. Remember over 50% of all cases begin with consumer complaints. It's probably even higher than that. Those consumer complaints are radioactive. They're deadly. If you don't have a complaint management system, you should implement one. Third-party vendors. Are you paying attention to who they are? Are they helping you? Are they good at what they do? Are they willing to share with you how they're protecting your interests? I love my documents. I'll be glad to sit down with you and review all the documents we have because I want to make sure you understand them, consumers understand them, but ultimately we draft and protect you. We follow the law scrupulously but they protect you when there's any question. How about an audit checklist? Do you have that? You should have an audit checklist of all your operations. Do you have a compliance management system? Some dealers do, but most dealers don't. I would urge you to learn about compliance management systems and have one. How about a compliance officer? Every dealer should have a compliance officer. Why? I pointed out that one slide of the NADA regulatory maze. Think of all those laws. You're so heavily regulated. Who's in your store that's conversant with those issues--doesn't have to know everything about them but should be conversant. Identify the issue, and know how to react to that issue. Because you're going to return to outside people to help you but you need to know what they are and that compliance officer can do that. And if, unfortunately, you’re ever contacted by a regulatory agency like attorney general or something like that, you want to cooperate fully. You want to make sure if they contact you, you're gonna say, “Yes sir, no sir.” Give them due respect and you try to cooperate because you're going to get a better result that way. Because once they have you in their crosshairs, they've got tremendous capability of harming you. The dealers that worked with me, I resolve problems. Dealers that didn't work with me, they ended up with bigger problems. Because we, the government, have a lot of resources. Predictions of the future. Predictions of the future are--prediction is very difficult, especially it's about the future. Niels Bohr said that. Very intelligent fellow. I will say this: it's all more of the same. All these threats that we just pointed out, they exist. They're ongoing. And they affect you and just by not paying attention doesn't mean you're going to evade them because if you get targeted then you've got a problem. So with that thank you very much for being here. I wish you the best of success in your careers and your sales businesses. Thank you.