They hope they do not get caught, or that nothing happens which will
bring financial ruin or put them jail. These are good, hard working
people who feel at times that the government is doing everything
they can to stop them from selling a vehicle.
    The ones that want to do what is right go to their lawyers. Their lawyers scare the heck of them, charge
    them huge amounts of money, and then sometimes don’t get it all right either. For example, I was at a dealership
    not long ago in Connecticut.  The subject of checking a customer against the SDN (Specially Designated
    Nationals) list came up. I had asked how they did their check. He told me that their Credit Reporting Agency did it
    for them. I then asked “even those customers that are paying cash?” He then told me his lawyer told him that it
    was only required if the deal was financed. “Not true.” I said. The law requires that all customers, business and
    organizations, have to be checked before the vehicle is delivered. It does not matter if is cash or credit. The next
    day I got a call from his lawyer blasting me for misinforming his client. He quoted to me what
    the requirements are from the Patriot Act. He is right. It does say in the Patriot Act “all financial
    transaction”. Then I pointed out to him Executive order 13224 which states “all business
    dealing” regardless if they are cash or financed. The lawyer said he never heard of that and
    hung up the phone. A few weeks later when I returned to the same dealership, they were
    checking all customers. The lawyer found out I was right and advised his client to check all
    deals, but I never got a thank you note from the lawyer.
While we are on the subject of OFAC and the SDN list, I heard this just the other day. I was at a
meeting about software solutions for compliance issues. The individual who was giving the
presentation said, “The OFAC requirement is a gray area. If we went by the letter of the law, a
dealer would have to check every person who comes in to buy a windshield wiper.” He is right about
most of what he said, but the OFAC requirement is not “gray” at all. The government does not
expect you to check each customer who buys a windshield wiper out of your parts department.
However, it does expect you to check someone out who comes in, or tries to order on
line, or by phone if they are making “unusual” requests
. A person wanting to buy 100 car
batteries is an unusual request. That person should be checked. The government expects us to
use common sense when it comes to this example. When it comes to selling a vehicle, it is black
and white. All persons, companies and organizations that purchase a vehicle before they take
possession of it, need to be checked.

Want more information about OFAC and the SDN list? Click on this link:
http://www.treas.gov/offices/enforcement/publications/
Want to see the SDN list? http://www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf
SUPERIOR DEALER SOLUTIONSsm
Copyright © 2008 Automotive Dealers Network. All rights reserved.
Michael is one of the nation's leading Compliance Experts.
He is an agent for Curran EasyCare, serving New England
Automotive Dealerships. They offer insurance service
coverage, RV coverage, driver care, GAP coverage and
keycare.
    Now let’s talk briefly about some of the other federal requirements. There is the Privacy Rule and the
    Safeguard Rule which are part of the Gramm-Leach-Bliley Act. Then there is the Red Flag Regulation which
    went into effect January 1st of this year. All dealerships have to be in compliance by November 1st, 2008.  First
    the privacy Rule. When a dealership arranges financing for a customer they must provided a privacy notice. In
    that notice they must tell the customer/consumer why they are collecting the information and who they are
    sharing it with. In addition, they must give the customer/consumer the right to “opt out” of the sharing of certain
    third parties. A third party could be someone like an advertising agency that you use.  It has to be clear on the
    privacy notice that they can “opt out” if they so desire.  If they do opt out, that does not mean you cannot share
    their private information with affiliated parties.  Each dealership needs to have a written Privacy Rule company
    policy. It is important to note that the privacy notice must be given and signed before information is collected.
    Most dealerships do it when they take the credit applications.

    Want more on the Privacy Rule click here: http://www.ftc.gov/bcp/conline/pubs/buspubs/glbshort.shtm
    There are simple low cost solutions. I think the hardest part of compliance is getting everyone within your
    organization to learn the right process for your company and be professional and consistent about it. NADA offers
    a ton of information to its members on how to comply.  Check your states NADA chapter to see what they can
    offer. I know that the Texas independent Automobile Dealers Association has some outstanding help with
    compliance issues. In addition, there are many software companies that aid the dealer. DealerTrack has come up
    with some great solutions to OFAC and Red Flags Compliance. Both done in one simple step while the customer
    is in F&I.  MenuVantage offers OFAC compliance and is coming out with Red Flag solutions soon. Patriotdealer.
    com offers OFAC and Red Flag Solutions. There are other companies out there too. I have just enough space to
    give you a few, and these are my top picks.
    For more information on any of these you can click here:


Michael Maguire
Agent-Trainer/Curran EasyCare
mmaguire@automotivedealersnetwork.com
The Safeguard Rule requires dealerships to protect the information they collect. As with the Safeguard Rule,
you must have a written company policy. The FTC gives dealerships a little flexibility when it comes to Safeguarding. You
can tailor your safeguard to your company size. For example, a dealership that is family run with only a hand full of
employees would not need the same safeguards of a dealership with four hundred employees. The higher the risks are,
the higher the standards. Once that customer has given you their private and public information, you have to protect it
from people who would misuse it or steal that customer’s identity. Protecting customer’s information is not only important
because it is the law and it keeps you from being sued, it is good for your public image. If a customer’s information ends
up in the wrong hands, it can make you liable for any damages and lots of bad press.

For more information on the Safeguard Rule click on this link:
http://www.ftc.gov/os/2002/05/67fr36585.pdf


    Now we have the “Red Flags” regulation which is part of the Fact Act (Fair and Accurate credit
    transactions) Act. This requires us to help protect customers from Identify fraud.  All dealership have
    to have written policy and have it implemented by November 1st, 2008. This requires us to be law
    enforcement’s eyes and ears to help them fight identity theft. In your policy, you have to come up with
    “Red Flags” that would help identify an individual who is using another’s identity and what to do about
    it once a person is thought to be using another person’s personal information.  It is a little more
    complicated than that, but that is it in a nut shell.

For more information on this click here:
http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.
gov/2007/pdf/07-5453.pdf
The government
expects
“diligence” when
it comes to
checking
customers to the
bad guy list.
View Michael Maguire's profile on LinkedIn