By Tom Kline,Lead Consultant & Founder,Better Vantage Point
This is how I run my life as a business owner, a parent, a husband, a friend, a colleague, a consultant, a brother, a son…well, you get the picture.
If there’s a problem to deal with, let’s get it handled right now. “Now management.” Handling problems and concerns now is how dealers make money, and importantly, keep the money they make.
Cox Automotive released a Q1 review with a collection of the top concerns among dealers. The number one concern was interest rates. The number two concern was the economy. The number three overall concern was market conditions and the number four concern was the current political climate.
A View from the FCC
Today, let’s focus on politics as there has been a lot of goings-on in the arena.
On April 10, 2024, the Federal Trade Commission (FTC) issued a report to Congress on how they were going to collaborate more with the state attorneys general.
Samuel Levine, Director of the Bureau of Consumer Protection was quoted in the press release as saying, “today's consumer protection challenges require an all- hands-on-deck response, and our report details how the FTC is working closely with state enforcers to share information, stop fraud, and ensure fairness in the marketplace.”
“The release further discusses how federal and state enforcers share their information and expertise to facilitate effective communication and cooperation. It also provides a breakdown of the FTC's structure and the description of the Consumer Sentinel consumer complaint database, the largest such information sharing network in the United States.”
“The report stresses the legislative need to restore the FTC's authority to seek equitable monetary refunds for injured consumers, presents ways to enhance collaboration and conserve resources by providing the Commission with the independent authority to seek civil penalties, and describes the agency's need for clear authority to pursue legal action against those who assist and facilitate unfair or deceptive acts or practices.”
Federal-State Partnership
That means both state and federal agencies are coordinating to go after bad actors who are taking advantage of consumers.
In my experience, they may also go after dealers who may be trying to do the right thing, but lack the necessary processes to prevent problems.
The federal government is telling you that increased enforcement is on its way. Believe them. In the future, I believe this enforcement will include the CARS Rule (Combating Auto Retail Scams) which is pending enforcement based on the court case filed by the NADA in Texas.
The Wrath of Khan
The FTC is headed by the Wall St. Journal-described “liberal chairwoman,” Lina Khan.
“Her aggressive actions against big tech and other industries have inflamed the business community, and not all have been successful. But in an anomaly in this partisan age, a group of conservatives have cheered her efforts, seeing her as a fellow traveler in the populist cause. The “Khanservatives,” as they call themselves, tend to be younger and Trumpier, part of the growing ranks of Republicans who question unfettered markets and see big corporations as an adversary to their constituents.”
“Khan is tapping into a generational shift in attitudes toward corporations and markets. More Republicans are bucking their long alliance with big business and accusing corporations of hurting workers, stifling free speech and imposing a liberal agenda on employees and consumers. Their beefs with big business are different from liberals’ focus on workers’ rights and corporate greed, but on policy, the two sides sometimes end up in the same place.”
“In 2022, 39 Republicans voted for a bill that increased fees on corporations in order to provide more resources to the FTC and DOJ's antitrust division to review proposed mergers and acquisitions.”
Delivering the Bad News
These facts represent a turnabout in politics which may directly affect your dealership.
So what, why am I telling you all this? Remember that I run with bad news and walk with good news. This is likely not good news for dealers:
Here’s why I see inaccuracies and mistakes.
What is a Dealership to Do
If the FTC comes into your store to check on your processes, what are they going to find? Consider all these issues in your business.
Besides “buttoning up” and installing processes at the store for the questions listed above, will you consider another idea in order to be ready for a visit from a lawyer or regulator? Here it is: Consider a compliance software solution to help organize and automate some of these rote functions. It’ll make your life easier and you’ll be able to corral your compliance activities. Installing a compliance workflow solution is just the remedy for your concerns and I promise you’ll sleep better at night once installed.
I hope you see you at the next convention, walking to me with good news!
Thanks for seeing things from a Better Vantage Point. Cheers.
Owning and running a dealership can feel like trying to tuck an octopus in bed and the tentacles keep flopping out. Tom Kline appreciates and understands this as, for 30 years, he was a dealership franchise owner. Kline specializes in solving dealership problems through risk mitigation remedies, compliance, and dispute resolution (i.e. tucking in the tentacles). He is the Lead Consultant & Founder of Better Vantage Point, Tuck The Octopus (a new, early efforts governance, risk, and compliance (GRC) program), and AlwaysDoBetter.com, and has worked with both publicly-held and private dealerships. He routinely speaks at national conferences, workshops, 20 groups, presents webinars about risk transferences and risk mitigation topics & techniques, and routinely provides expert witness testimony to defend dealerships.