Legal News/Legislation

NHTSA wants OEMs to make Takata air bag repair plans public

WASHINGTON, D.C. - 

The U.S. Department of Transportation’s National Highway Traffic Safety Administration knows defective Takata airbags still are in vehicles currently in operation, so the regulator wants automakers to take additional steps to make sure these units are repaired.

Late last week, NHTSA made an announcement, urging OEMs affected by the Takata air bag recall to make publicly available on their websites their plans for replacing all defective bags in their vehicles.

“It is imperative that manufacturers take every available step to reach each and every owner of a vehicle with deadly air bags and take action to ensure that those dangerous air bags are replaced as soon as is safely possible,” NHTSA Deputy Administrator Heidi King said.

“Public plans will be a resource to communities and to individual consumers to support effective recall implementation nationwide,” King continued.

King added that she has met with affected automakers and urged each to accelerate their remedy of defective Takata air bags. She asked that the plans include innovative methodologies for maximizing recall completion rates.

“To keep consumers safe in their cars and trucks, automakers should learn from their recall experiences to-date and from one another and innovate broadly and creatively when crafting plans to better engage with consumers and communities to replace every last defective air bag in their vehicles,” King said.

In cooperation with the independent monitor of Takata and the coordinated remedy program, NHTSA has engaged in direct consumer outreach and coalition building in key high-risk areas.  

In 2017, NHTSA launched a geo-targeted campaign in the eight highest risk areas to increase public awareness in those locations about these dangerous air bags. NHTSA said it continuously monitors repair rates for vehicles affected by the Takata air bag recalls and posts that information on its dedicated Takata Recall Spotlight website to keep consumers informed on the current status of the recalls.

NHTSA pointed out that it also added improved search functions to its website. Consumers can view Takata air bag repair rates by priority group and repair rates over time for each affected vehicle manufacturer.

The agency also mentioned that it regularly informs the public about the recall through its social media channels of Facebook and Twitter.

NHTSA closed by noting it will continue its consumer outreach efforts in support of the Takata Independent Monitor’s localized Operation Find and Fix repair pilot programs in high-risk communities. The pilots will take place through the fall. Vehicles in these high-risk regions have been prioritized to get repair parts first, according to officials.

The agency said the Takata air bag recall is the largest and most complex vehicle recall in U.S. history, involving 19 vehicle manufacturers, 37 million U.S. vehicles, and approximately 50 million air bags.


FTC checks 94 dealerships in 7 states for revised Buyers Guide

WASHINGTON, D.C. - 

Remember when your teacher told you to put all books and materials away because a pop quiz was coming? The Federal Trade Commission sort of did the same thing recently to dealerships.

The FTC, working jointly with 12 partner agencies in seven states, conducted the first compliance sweep of dealerships since the amended Used Car Rule took effect earlier this year.

Under the amended rule, the regulator reiterated that dealers must display a revised window sticker called a “Buyers Guide,” which contains warranty and other important information for consumers, on each used vehicle they offer for sale.

The compliance sweep was conducted between April and June in 20 cities nationwide. The FTC said inspectors found Buyers Guides on 70 percent of the more than 2,300 vehicles inspected, with almost half of those displaying the revised Buyers Guide.

Of the 94 dealerships inspected, officials found that 33 had the revised Buyers Guide on more than half of their vehicles, and 14 had revised Buyers Guides on all of their used vehicles.

Following the sweep, the FTC said it sent letters to each dealership detailing the results of the inspections and providing material to help them come into full compliance with the amended Rule.

Over the coming weeks, the regulator indicated that dealerships that were not displaying the revised Buyers Guide can expect follow-up inspections to ensure they have brought themselves into compliance with the amended rule.

Under the FTC Act, dealers who fail to comply face penalties of up to $41,484 per violation. State and local law enforcement agencies also enforce the recently amended rule.

Through this sweep, the FTC and its partners inspected dealerships in seven states:

— California: Burbank, North Hollywood, Richmond, San Bruno, San Jose, San Pablo and Van Nuys
— Florida: Jacksonville
— Illinois: Chicago
— New York: New York (Queens)
— Ohio: Brooklyn Heights, Cleveland, East Cleveland and Cleveland Heights
— Texas: Arlington, Dallas and Grand Prairie
— Washington: Lakewood, Puyallup and Tacoma

To recap, back on Nov. 18, 2016, the FTC amended the Used Car Rule. Under the amended Rule, as of Jan. 28, dealers are required to display a revised Buyers Guide on all used vehicles they offer for sale. The revised Buyers Guide:

• Changes the description of an “As Is” sale

• Places boxes on the face of the Buyers Guide that dealers can check to indicate whether a vehicle is covered by a third-party warranty and whether a service contract may be available

• Provides a box that dealers can check to indicate that an unexpired manufacturer’s warranty applies

• Adds air bags and catalytic converters to the Buyers Guide’s list of major defects that may occur in used vehicles

• Adds a statement that directs consumers to obtain a vehicle history report and to check for open recalls

• Adds a statement, in Spanish, to the English-language Buyers Guide, advising Spanish-speaking consumers to ask for the Buyers Guide in Spanish if the dealer is conducting the sale in Spanish

• Provides a Spanish translation of the statement that dealers may use to obtain a consumer’s acknowledgement of receipt of the Buyers Guide

The FTC thanked the following partners for their assistance in the current compliance sweep, including:

— California Department of Motor Vehicles Inspection Division
— Contra Costa County Office of the District Attorney
— Los Angeles County District Attorney’s Office
— Santa Clara County Office of the District Attorney
— San Mateo County Office of the District Attorney
— Florida Bureau of Dealer Services
— Cuyahoga, Ohio, County Department of Consumer Affairs
— Ohio Bureau of Motor Vehicles
— City of Chicago Department of Business Affairs and Consumer Protection
— New York City Department of Consumer Affairs
— Texas Department of Motor Vehicles
— Washington State Office of the Attorney General

Schumer urges FTC to intensify Used Car Rule to weed out flooded vehicles

WASHINGTON, D.C. - 

Even with all of the clashes happening on Capitol Hill nowadays, U.S. Senate Minority Leader Charles Schumer over the weekend delivered a letter to the Federal Trade Commission to outline his significant concerns about what the New York lawmaker dubbed, “hurricane cars.”

As a storm currently brews off of the North Carolina coast and is predicted to drift out to sea, Schumer fears scores of vehicles damaged during previous hurricanes currently are in dealership inventory. Therefore, the powerful Senator wants the FTC to increase the regulatory capability of the Used Car Rule already in place in an effort to keep flooded vehicles from being retailed.

“While the FTC has been sounding the alarm on ‘hurricane cars,’ consumers are still at risk of being duped and burdened by a financial road of ruin if they unknowingly buy one,” Schumer said in a news release distributed on Sunday. “That’s why the FTC needs to drive forward with more than a consumer warning and hit the gas on a plan that uses the ‘Used Car Rule’ already on the books to ensure that the sticker slapped on every used car in a lot details a robust ‘flood check.’

“In many cases, ethical used car dealers are already performing this kind of check anyway, as part of the inspection process, and all we are saying today is that disclosure of this information should be one of the rules before these cars are able to hit the road,” he continued.

“Whether you’re a New Yorker looking to buy in New York, or a New Yorker looking on the internet for a car parked in another state, the risk of winding up in the driver’s seat of a ‘hurricane car’ is a headache at the least, but a real danger, too,” Schumer went on to say.

Schumer cited estimates of more than 600,000 vehicles being damaged during last year’s hurricane season, including the record-setting flooding in Texas stemming from Hurricane Harvey. Schumer said that in many cases “a ‘hurricane car’ can be ‘cleaned up’ for as little as $2,000 and then sold to an unsuspecting consumer.”

So the Senate Minority Leader made his case to Federal Trade Commission chairman Joseph Simmons in a five-paragraph letter.

“Given the uncertainty surrounding the quality of so many of these vehicles ravaged by flooding during past storms and new industry data showing used car sales are surging to their highest levels in five years, I respectively urge you to reevaluate the Used Car Rule and consider incorporating a flood check as part of the required disclosures included in the Buyers Guide offered on used cars, so that consumers know up-front when cars may have been impact by serious weather elements,” Schumer wrote.

“Incorporating a flood check is the right type of sound policy that could help consumers make educated vehicle purchases, and possibly save lives,” he added.

Fitch dissects tariff implications on OEM credit profiles

NEW YORK and WASHINGTON, D.C. - 

As nine automotive industry associations representing vehicle and parts manufacturers in the U.S., Canada and Mexico urged a renewed focus on trade negotiations with the U.S., Canada and Mexico to modernize NAFTA, Fitch Ratings took a deeper dive into the potential financial ramifications of President Donald Trump's actions. 

Fitch explained that U.S. tariffs of up to 25 percent on all imported automobiles and parts would have a negative effect on the cash flow and credit profiles of the global auto manufacturers. But analysts think financial implications would vary significantly.

“We believe the auto tariff threat supersedes other trade-related concerns and raises credit risk for the entire automotive sector but do not expect increased tariffs to necessarily result in widespread ratings downgrades, given the credit profile of the industry is much stronger today than it was during the global auto crisis of 2008-2009,” Fitch analysts said.

Fitch indicated the mix of domestic-to-foreign production for vehicles sold in the U.S. and the ability to flex production lines varies across manufacturers so the impact of U.S. import tariffs and any retaliatory response would differ. The firm pointed out that manufacturers importing a high percentage of U.S. sales, including Jaguar Land Rover (JLR), Mazda and Volvo, are more vulnerable.

Conversely, automakers that domestically produce most of the vehicles they sell in the U.S., such as Tesla, Ford, General Motors and Honda are more insulated, according to Fitch.

The ratings agency estimated the aggregate financial impact of a 25-percent tariff on imported vehicles, assuming all else equal, would be as much as $47 billion annually, based on the Alliance of Automobile Manufacturers' estimate of an average $5,800 price increase per imported vehicle and Fitch’s forecast of 16.8 million sales in 2018, of which about 48 percent would likely be imported.

This estimate is based on tariffs on vehicle sales and does not include imported auto parts used in the assembly of vehicles in the U.S., which could further raise the cost of the tariffs significantly.

Fitch noted that potential financial offsets for manufacturers could include raising prices to pass along the incremental tariffs to customers, absorbing the tariff and offsetting the impact with cost reductions in other areas, or shifting production to the U.S. to avoid the tax.

“However, higher prices could hurt sales, and shifting production would be challenging, as many plants in the U.S. continue to run at capacity, and building new plants would take time and is expensive,” analysts said.

Fitch went on to mention a key component of its credit work is stress testing for an industry downturn.

Analysts contend that many global auto manufacturers' credit profiles are stronger today than they were at the beginning of the last industry decline. Median leverage and interest coverage metrics for Fitch's universe were 5.5 times and 4.7 times, respectively, in 2007, versus 1.2 times and 21.6 times in 2017.

“Ford and GM have strong liquidity positions and relatively low leverage, providing them significant financial flexibility if a significant decline in volumes occurred. Fiat Chrysler also has headroom in its financial ratios; therefore, negative rating action coming solely from the consequence of higher tariffs is unlikely,” Fitch said.

“Most European manufacturers have significant headroom in their ratings, with strong financial profiles. BMW, Daimler and Volkswagen's operating margins are solid for their respective ratings, and the companies could sustain moderate pressure on profitability and cash flows without impairing their credit profiles,” the firm continued.

“JLR's profitability is solid for the rating, but its cash generation is weaker than German peers. JLR is also pressured by the investments it needs to make to face the industry's other long-term trends and the major challenges to manage Brexit,” Fitch went on to say.

“Toyota, Honda and Nissan have strong financial profiles, with low leverage and sound liquidity, and well diversified global operations. However, increased tariffs would pressure margins at a time when Japanese car makers are struggling with lower sales in the U.S., and may therefore negatively impact credit metrics,” the ratings agency added.

“The U.S. tariffs are unlikely to have a meaningful impact on the revenue of Chinese automakers, given their small exposure to the U.S.”

No matter what the Fitch analysis might indicated, OEM representatives are wary of what the White House might do.

The Alliance of Automobile Manufacturers, American Automotive Policy Council, Association of Global Automakers, Asociacion Mexicana de la Industria Automotriz, Canadian Vehicle Manufacturers' Association, Global Automakers of Canada, Motor & Equipment Manufacturers Association, Canadian Automotive Parts Manufacturers' Association, and Industria Nacional de Autopartes A.C. issued the following joint statement.

“As a new government forms in Mexico on December 1st, 2018, we believe now is the time for all parties to return to the negotiating table with a renewed commitment to the modernization of a cohesive three-country NAFTA agreement,” the organizations said.

“We have a great opportunity to update this trade agreement and it is in the best interest of all three countries to refocus on establishing a new NAFTA agreement that will allow the North American auto industry to remain globally competitive,” they added.

NADA hopes administration’s 3 trade goals can happen without burdening tariffs

TYSONS, Va. - 

As stores got Fourth of July sales campaigns into full swing, the National Automobile Dealers Association delivered comments to the U.S. Department of Commerce in an effort to make it clear that franchised dealers oppose the imposition of new tariffs or quotas on imported vehicles or parts.

In comments sent to the federal agency ahead of Independence Day, NADA said that the association fears that any new tariffs or quotas will result in higher vehicle prices and reduced choice for Americans ready to purchase an automobile.

NADA reiterated that it fully appreciates the administration’s trade goals, including:

— Enhancing the domestic production, sale, and export of American-made vehicles and automotive parts

— Curbing unfair foreign trade practices involving automobiles and automotive parts

— Reducing America’s trade deficits and increasing domestic jobs for Americans.

But the association stressed that broad-based tariffs will result in significant negative impacts on NADA’s 100-percent American automobile dealers and the American working families and American businesses who buy automobiles and automotive parts from them. NADA pinpointed these impacts include higher vehicle prices, as well as a reduction in the number, or even the elimination, of imported vehicle models, thereby reducing competition and customer choice, and ultimately depressing demand.

“The president is rightfully concerned about trade imbalances and manufacturing jobs in the United States,” NADA president and chief executive Peter Welch said. “But automobile production today is so deeply integrated across international boundaries that virtually all cars and trucks, domestic and international, have foreign components even if they are assembled in the United States.

“And a tariff, depending on how it is implemented, could raise prices dramatically for customers and threaten auto industry jobs at home. We look forward to working with the administration to find solutions that don’t dramatically increase prices or limit choices for our customers,” Welch added.

NADA’s comments were filed with the Commerce Department in response to proceedings being conducted under section 232 of the Trade Expansion Act of 1962 intended to determine the effects on the national security of imported automobiles, including cars, SUVs, vans and light trucks and of imported automotive parts.

Dealers can read .

Federal appeals court affirms Carfax lawsuit victory

CENTREVILLE, Va. - 

This week, Carfax welcomed a unanimous decision by a three-judge panel of the United States Court of Appeals for the Second Circuit upholding the ruling of the District Court to dismiss a lawsuit filed against Carfax by Maxon Hyundai Mazda and approximately 470 dealers.

Carfax said the Court of Appeals agreed that the dealers’ arguments were without merit.

The vehicle history report provider added that the Court of Appeals ruling essentially ends the case.

“In our over 30 years of doing business, Carfax has never wavered from our commitment to help dealers increase the success of their business,” said Bill Eager, vice president, dealer business unit at Carfax.

“Our focus is, and always will be, on providing the innovative products and exemplary services our dealer customers expect and rely on to confidently acquire, advertise, service and sell used cars. We appreciate the support of our dealers and look forward to forging even stronger partnerships with them,” Eager continued.

Carfax highlighted that more than 30,000 U.S. dealers choose Carfax information to help them in virtually all aspects of their used-vehicle operations. Carfax added that it maintains a database that currently exceeds 20 billion records.

Regulatory compliance should top every dealer’s mind, to-do list

DETROIT  - 

Regulatory compliance is every dealer’s business.

That means issues such as advertising compliance, data and cybersecurity and making sure consumers know or can find out when the vehicle they purchase has an open recall, should be near the top of every dealers’ to-do list, according to dealer trade groups, attorneys, and others that represent dealer interests.

And if you think changes at the Consumer Finance Protection Bureau will give dealers a little breathing room, take a deep breath.

Then consider this:

States are stepping-up their scrutiny of financial services companies and dealers, and if the CFPB finds a violation of law make no mistake about it, the agency will do its job, said Shaun Petersen, senior vice president, legislative and government affairs at the National Independent Automobile Dealers Association.

 “The acting director (Mick Mulvaney, who is also director of the Office of Management and Budget) has said, we’re not going to push the envelope, not going to overstep boundaries or limits, creating things that aren’t there, but if there are things that need to be addressed, we are going to address them,” Petersen said.

“One other thing we’ve seen with the CFPB and the acting director is that he has come out and said ‘state attorneys general, you need to take a bigger role, a lot of this you should be doing.’  It’s not just specific to dealers.”

Patty Covington, a partner at Hudson Cook, agrees that state attorneys general have stepped-up their scrutiny of financial services which includes dealers and “in New York and New Jersey, I’ve seen several enforcement actions against dealers.” More actions against dealers

The New Jersey attorney general brought actions against dealers amid allegations that some vehicles’ advertised prices were different from their actual prices. The actions and allegations involved vehicles that had add-on products installed on them, she said.

Brad Miller, director of legal and regulatory affairs at the National Automobile Dealers Association, agrees that dealers should take advertising compliance very seriously as does the Federal Trade Commission. He too, has seen “literally dozens” of advertising enforcements brought by the FTC and other regulators.

NADA recently issued an advertising compliance guide that highlights things that raises red flags with the FTC, Miller said.

“Finance or lease advertisements that contain certain trigger terms such as monthly payment and APR must also include certain other additional disclosures required under federal rules,” Miller said.

Also helpful to dealers is NADA’s Regulatory Maze, its annual updated list of major federal regulations, Miller said.

Released in March 2018, the 12-page document contains brief descriptions and guidelines of dozens of federal laws such as IRS treatment of demonstration vehicles, employee drug testing and the Fair Credit Reporting Act.

It also addresses hot button topics such as protecting consumers’ personal information and recalls.

For a copy of NADA’s Regulatory Maze, visit .

Click Advocacy / Regulatory Affairs / Regulatory Reference Materials.

(A log-in email address and password are required to download the full document.)

Regarding recalls

Regulatory Maze, under the National Highway Transportation Safety Administration recall regulation heading, notes that “new vehicles and parts held in inventory that are subject to safety recalls must be brought into compliance before delivery.”

When it comes to used vehicles, some dealer representatives suggest that dealerships disclose recall information to their customers and consider including links in their used-vehicle advertising to http://safercar.gov, a website that allows anyone to search for open recalls.

Helpful to dealers is a new tool that allows them to search for open recalls on up to 10,000 vehicles at one time, at no charge. Available at , the tool was created in partnership with the Alliance of Automobile Manufacturers, the Association of Global Automakers and Carfax.

To protect consumers’ data, the FTC Safeguards Rule states that “dealers must develop, implement and maintain — and regularly audit — a written security program to protect customers’ information and must ensure that their service providers provide similar safeguards.”

Eric Chase, a dealer attorney with Bressler, Amery & Ross, in Florham Park, N.J., said dealers need to have one or more cyber experts on hand who know how to protect personal information — such as bank account information and social security numbers collected from customers and employees — from cyber crooks and high-tech hackers.

He said cyber issues are always “hot topics” at the National Association of Dealer Counsel conferences, with which he is involved and is composed mostly of attorneys that represent dealers.

“This is a top issue for dealers, and they’d better be watching out for all the problems that can happen, because if they don’t, it’s at their peril,” said Chase.

“We’ve seen instances where people go online and purchase cars, and they’re all phony.”

Taking a low-tech approach

Keeping consumers’ personal information safe is a major compliance headache for dealers, but strong cybersecurity measures are only half the solution.

A low-tech, common sense approach can help, experts agree.

Sometimes it’s as simple as closing or locking a door or vetting third-party companies that have access to your property or data, said Max Zanan, president of Total Dealer Compliance, which is a company that provides in-store and online compliance audits for dealerships.

“I’ve seen F&I offices that don’t have doors; I’ve seen F&I offices that have doors but not locks and keys,” Zanan said.

“Let’s put credit applications and driver’s licenses into the (computer) system and limit access. If there is a company that comes in clean, there’s no paper in the F&I office for them to see,” he said.

“If a dealer uses a marketing company that have access to their customer data base, they should have safeguards in place.”

Florida Congresswoman to appear at NIADA Convention and Expo

ARLINGTON, Texas - 

A trailblazing federal lawmaker who took a stand against the Consumer Financial Protection Bureau is set to address the independent dealership community.

Rep. Stephanie Murphy (D-Fla.) will be the featured speaker for the Welcome Luncheon at the 2018 National Independent Automobile Dealers Association Convention and Expo, coming up June 18-21 in Orlando, Fla.

Murphy, who in 2016 became the first Vietnamese-American woman elected to Congress, represents Florida’s seventh district, which includes downtown Orlando.

In only her first term, NIADA highlighted she has already built a strong record of supporting small business.

The former businesswoman serves on the House Small Business Committee — she is the ranking Democrat of the Subcommittee on Contracting and Workforce — and has been the lead Democratic co-sponsor on several bipartisan bills aimed at promoting the interests of small businesses.

Murphy was one of 11 Democrats who in May voted in favor of repealing the CFPB’s controversial 2013 indirect auto lending guidance.

She is also a member of the Blue Dog Coalition, a group of House Democrats who according to their mission statement are “dedicated to pursuing fiscally responsible policies, ensuring a strong national defense for our country and transcending party lines to get things done for the American people.” She is co-chair of that caucus’ Fiscal Responsibility Task Force.

Murphy says she is “working to reduce the regulatory burdens on small businesses, increase their access to capital and help strengthen our region’s economy by creating more well-paying jobs.”

The 72nd annual NIADA Convention and Expo is expected to be the largest event in the used car industry thanks to NIADA’s recent acquisition of the National Alliance of Buy-Here, Pay-Here Dealers.

The combined NIADA/NABD Mega-Conference will include a record 60 education sessions in five educational tracks — retail, BHPH, legal and regulatory, certified pre-owned and digital marketing — and the largest Expo Hall in the event’s history with more than 210 exhibitors offering the latest state-of-the-art products and services designed to help dealers compete and succeed in today's ultra-competitive used vehicle market.

More details .

COMMENTARY: Auto dealers and GDPR regulations

The General Data Protection Regulation, commonly known as GDPR, is a regulation in EU law on data protection and privacy for all individuals within the European Union. The law was put into place on April 27, 2016 and allotted a two-year adoption grace period for businesses to strategize and implement compliance. 

The GDPR encompasses all areas of the automotive market, including manufacturers, dealerships and third- party vendors. 

The potential fines pose a high risk for automotive businesses, as they must be in compliance by May 25.  

Automotive dealerships are very much in the crosshairs of the GDPR regulations.

Several automotive brands have displayed international influence with the presence of not only dealerships in several nations, but through international marketing efforts. A well-known example might include Porsche Holdings, and its business of selling Volkswagen and Porsche cars through Central and Eastern Europe.

Outside of the benefit of concrete locations near its customers, there is marketing data to be obtained through sales and marketing efforts.  The utilization of this data is where automotive dealers may find difficulty with GDPR compliance.

The GDPR places the automotive business under scope not only its presence in the EU, but also due to its monitoring of European Union data subjects, and attempt to offer them goods and/or services.

Marketing practices most likely include the use of automated individual decision making against EU data subjects, requiring explicit consent under the GDPR. Processing is broadly defined in the regulation to include most actions that can be performed with data and can specifically refer to collection and storage, which dealerships in this case, are likely doing.

Therefore, automotive dealers must have processes in place to honor nine distinct rights awarded to EU data subjects, and be able to operate under the guiding privacy principles, defined within the GDPR. The regulation further dictates appropriate security efforts around the protection of personal data, establishes breach reporting requirements and increases the risk associated with vendors processing this data. These expansive requirements make the process of marketing and vendor outsourcing much more complex for anyone with a direct consumer relationship with EU data subjects.

Smaller mom-and-pop owned dealerships may not be considering the new regulations as seriously as they should be, but past enforcement actions point to enforcement risk even with these smaller companies.  The GDPR states that non-compliant companies posing a risk to EU citizens and their privacy can be fined up to $20 million or 4 percent of their global turnover for the previous fiscal year, whichever is greatest. It is important to note that this fine can be per violation.

There are several steps that companies must immediately embark on to mitigate their exposure to risk. A solid start begins with understanding GDPR regulation applicability to various parts of the automotive business, and understanding each unit’s risk profile to establishing priorities for the initiative. Once risk and priorities have been identified, it is critical for organizations to identify and establish their lawful basis for processing of this data.

Every industry has its own unique risk and operational challenges, and every business within has its own maturity relative to industry peers.  Using the trusted counsel of a compliance firm helps to quickly identify both industry and organizational risk that, as a non-biased third-party, are often otherwise overlooked. A risk management and compliance consulting firm can help organizations quickly identify risk, formulate a plan to mitigate this risk and setup ongoing monitoring programs to maintain valuable records of compliance. 

Some have suggested the GDPR will set the global precedent for data privacy and security regulations.  Brazil and China have both showed interest in forming similar requirements to protect the privacy of its citizens’ personal information from businesses storing and transferring data across borders.

To adequately prepare for the GDPR and similar regulations likely to be introduced in the future, businesses must begin educating themselves on these regulations, and how they will choose to conquer the requirements. Applicable processes and procedures can obviously help minimize exposure to fines, but also provide an opportunity within the market to reassure customers and in return, earn their trust.

Greg Sparrow is senior vice president and general manager, CompliancePoint

NICB recaps how scammers using apps swindle used-vehicle buyers

DES PLAINES, Ill. - 

Perhaps an unfortunate incident involving a Florida man trying to buy a Ford F-150 could serve as appropriate evidence as to why working with reputable dealerships and finance companies might be best when purchasing a vehicle.

Over the past few years, the National Insurance Crime Bureau (NICB) has warned consumers to be on the lookout for scams when buying a used vehicle.

Working with law enforcement officials in Daytona Beach, Fla., NICB has identified a number of online sales of vehicles using the mobile app OfferUp. Officials said these vehicles are listed below market value and are being sold with fake VIN numbers and/or phony titles.

NICB recapped that Anthony Callegari of Deltona, Fla., was looking to purchase a used truck as a birthday and graduation present. Using the app, Callegari found a 2017 Ford F-150 listed in Daytona Beach. After meeting the seller at a gas station, he test drove the truck and agreed to purchase it for $20,000 cash.

When he went to register the truck, officials told him the title was fake. He attempted to the seller to discuss the issue, only to find out that the phone number had already been disconnected.

Callegari notified the Daytona Beach Police and an investigator, accompanied by an NICB Special Agent, came out to inspect the truck. They discovered three other VIN plates glued under the fake VIN plate on the dashboard. The original VIN was from an F-150 that had been reported stolen in March and was deemed a total loss by the insurance company.

The officers also found a GPS tracking system in the glove box. Authorities believe the seller intended to track the truck and steal it. Since he only provided one key fob to the buyer, he could use the other key fob to steal the truck again.

Once it was stolen, NICB alleged the thief would quickly list it for sale again on the app with another fake VIN number and title.

Since the vehicle was stolen and the insurance company had paid the claim, police confiscated it, leaving Callegari without a truck and no recourse to regain his $20,000.

“Scams like these have all the appearances of being legitimate sales,” NICB president and chief executive officer Joe Wehrle said. “However, these alleged criminals are selling stolen VIN-switched vehicles, and the buyers are being scammed out of thousands of dollars.”

Recommendations that also could benefit wholesalers and used-car managers who scout the internet for inventory, the NICB offers these tips to help you avoid becoming a victim of vehicle cloning:

— Be careful when purchasing a used vehicle from someone advertising it online or in a newspaper.

— Any face-to-face meetings should take place at a location that is highly public, preferably at a police station.

— Use the free NICB VINCheck system and a vehicle history report to look for red flags.

— Have the title and VIN number checked by authorities before putting down any money.

— Trust your instincts. If a used-vehicle price sounds too good to be true, walk away.

Anyone with information concerning insurance fraud or vehicle theft can report it anonymously by calling toll free 800-TEL-NICB (800-835-6422), texting keyword “fraud” to TIP411 (847411) or submitting a form on its website.

More details about this scam are available through this NCIB video:

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