Put Your Team in a Position to Win in 2026

“How are you going to help me protect my business?” I get asked this question a lot. I welcome this query because legal and compliance risk remains a mystery to a lot of car dealers. This discussion that follows provides me an opportunity to delve into some topics that aren’t usually on the minds of a lot of dealers and to illustrate just how dangerous the car sales and finance waters can be.

During one such recent conversation with a BHPH dealer, I provided this short list:

• Do your personnel understand the Buyer’s Guide, Credit Application, Retail Installment Contract and other documents used in the sale and financing of a vehicle and the dangers presented if these documents are incorrect?
• Federal and state advertising laws have lots of tricks and traps, does your team consider them when creating content?
• Identifying traps and tricks in credit dispute letters
• Spotting a dangerous fact pattern in a consumer bankruptcy case
• Teaching sales personnel about the difference between extended service contracts and limited warranties
• How to write more effective (and less risky) collection letters
• Setting up an effective complaint management system

Each of these issues could prove costly if mishandled, either through lawsuits or regulator action, and this is certainly not an all-inclusive list, it's just a short sampling of actual issues that I’ve dealt with recently. This list alone touches upon a dozen or so laws that could put a dealership in jeopardy and, again, that’s just for starters. Failing to handle any one of them correctly could create costly liabilities.

Are You Merely “Checking the Box?”
Unfortunately, my observations after over 30 years of serving this industry is that training is often either ignored altogether or delivered in a “check the box” format which is woefully inadequate. Most training focuses on a high level overview of the “black letter law” rather than providing a practical understanding of how to work through a given issue. For instance, the vast majority of collection training I’ve seen provided to auto dealers and finance companies focuses on the Fair Debt Collection Practices Act (“FDCPA”), which is a federal law that applies to third parties collecting debt and provides an exemption for those collecting their own accounts (first party collectors). While it's true that many state laws have adopted similar provisions to the FDCPA that need to be understood, the end result of this training is often a focus on learning code sections not even applicable to the business. Even worse, many written policies state a goal of FDCPA compliance, which can then be used against the company if it falls short.

Strive to Do Better in 2026
At the start of this new year, my challenge to each one of you is to ask yourselves whether you are providing your personnel with sufficient training and support to do their jobs! I spoke to a bankruptcy account manager recently that had no previous experience handling bankruptcy cases and was moved into this position because someone else had left the company. Similarly, there was the underwriting team that didn’t know the difference between the Fair Credit Reporting Act (“FCRA”) and Equal Credit Opportunity Act (“ECOA”) and the collectors that never were told the proper message to leave on an answering machine. I could go on, but you get the idea.

Dealership personnel are the first line of defense. They must be able to make good decisions that will protect the company. As sports coaches always say, their job is to put the players in a position to win. Similarly, it’s management’s responsibility to do some self reflection and ask itself the hard question of whether the team has been provided with the tools to analyze the types of issues that come across their desk on a daily basis. Training doesn’t (and shouldn’t) need to take the form of a minilaw school class, but it should combine sufficient depth to understand the law or regulation with an examination of how these issues are likely to arise.

My Challenge to You
When I begin working with a new client, I often start by telling the personnel that I’m deputizing them to be my eyes and ears in identifying and eliminating compliance and legal risk. I’m not there every day, but they are, and they are in the best position to spot the issues and ask for help. If they can effectively identify the issues that need attention, we can collaborate to handle them and protect the business. So look around your business with a fresh set of eyes and consider whether each department has received sufficient training to perform this function. If not, it’s time to get started.

As we enter this new year, ask yourself how your current legal and compliance risk compares to this same time last year. Have you taken any steps to protect your business and keep money in your pocket? Are you even aware of the risks that are out there from regulators and lawsuits? Or do you put your head in the sand and adopt a strategy of “I hope they don’t get me?” If you are in the same position as last year, or if you don’t even know what position you are in, it’s time to take ownership and do something.