Dealerspan News
November Auto Success Magazine Article
Nov 08, 2008It is November 1st, Now what?
The mandatory deadline for meeting the Red Flags Rule has now come and gone. If you are a dealer who has decided to wait to implement your Identity Theft Prevention Program, or maybe you are gambling that the FTC will not come to your dealership, so you are not going to implement one at all. The odds may be on your side but, know this, you are risking a great deal.
The fine that the FTC can levy on a business that has violated this federally mandated law is $2500 per “knowing” incident. You may be thinking to yourself, “that doesn’t sound that bad, I mean it is a tremendous hassle to put this Identity Theft Prevention Program in place, I will just pay the fine instead.” What you may not understand is that what the FTC is implying as a “knowing” violation, every finance or lease deal which takes place after the deadline. So, if you sell 100 cars a month and you finance 50% of them, which, using simple math is 50 “knowing” violations. Multiply that by the $2500 and now you know why this is such a bad risk idea.
You may ask yourself, “I need a Red Flag Solution for my dealership but I do not have the resources to put it together, and time is definitely not on my side to do it myself, where do I start and what do I look for?”
When looking for a Red Flag solution dealers should look to address some of the tougher and more time consuming aspects of compliance, such as:
- The process and time involved in developing the required Identity Theft Prevention Program.
- Assessing your business risk level when it comes to Identity Theft(in all locations)
- The Training of all necessary staff
- Improving overall dealership knowledge with informative data to assist the staff in detecting Red Flags in their dealership.
When all is said and done a careful approach should be used when choosing an outside vendor to service your Red Flag needs. A company may tell you that they have a Red Flag solution for you, but if they do not offer you a turnkey solution or means of building your Identity Theft Prevention Program then you will NOT be compliant with the Rule. There are systems out there that assist you in identifying potential Red Flags, some of which are great tools, but will not make you compliant.
Pay attention to what is out there and remember your business’ livelihood is at stake. Do not ignore this mandate, start your Identity Theft Prevention Program now and do not forget to train your staff appropriately to look for potential Red Flags in your dealerships.
Jason Blair
President/Founder
Dealerspan, LLC.
