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HOT TOPICS
2015 GNYADA Membership Directory
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Many states permit“reasonable”doc fees but do not give any guidance on what constitutes“reasonable”for
this purpose. A series of cases claimed dealers who charged doc fees were practicing law without a license
since charging a person for preparing a legal document (the retail installment sales contract) is considered
practicing law. States split on these cases but courts in Missouri and Arkansas upheld the argument and
ruled that the dealers were in fact practicing law without a license. Contact your lawyer about what is a
permissible “doc fee”in your state.
4.
Establish a consumer complaint resolution process and include timelines for a quick and ef cient
resolution.
Try to establish an informal mediation process with your consumers either with a neutral officer at the
dealership or through a local association such as your regional auto dealer association or a mediation
company. Many problems can be resolved by an effective mediator prior to litigation or arbitration if the
dealer and customer are at an impasse. Consult your local attorney on the possible use of arbitration clauses
and class action waivers if mediation is unavailing. Arbitration and class action waivers are discussed in
Chapter 8.
5.
The Consumer Financial Protection Bureau has established a complaint hotline for auto nancing
complaints, and the CFPB af rmatively engages in swiftly resolving the complaints (typically in
favor of the consumer) and using the database to provide information to the FTC or State Attorneys
General for further action.
For these reasons, you don’t want to have a customer file a complaint against you with the CFPB. Thus
it is critical that you do everything possible to resolve consumer complaints in-house, even if it means
being liberal in meeting the consumer’s concerns. A customer filing a complaint on the CFPB’s complaint
hotline can put you“on the radar screen”for the CFPB, FTC or Attorney General—not a good place to be. To
make things worse, the CFPB is proposing to publish all of the consumer complaints so all your disgruntled
consumers will have their allegations on the CFPB complaint website where plaintiffs’ lawyers will be
actively watching.
6.
Have an attorney or compliance professional do periodic compliance audits and “mystery shopping”
at your dealership to identify areas that might support UDAP violations.
Remember that in many states a violation of any federal consumer protection law or regulation (e.g., failing
to publish a Spanish-language Used Car Guide on a used vehicle that was negotiated for sale in Spanish,
failure to provide an adverse action notice) is an automatic violation of a state’s UDAP law. Promptly correct
any deficiencies identified using appropriate staff training to avoid repetition or other conduct that may
lend itself to being an unfair or deceptive trade practice. Remember to live by your dealership’s code of
conduct and train your employees frequently.