Therese (Terry) G. Franzén, Esq. FRANZÉN AND SALZANO, P.C. 40 Technology Parkway South Suite 202 Norcross, GA 30092-2906 770-248-2882 770-248-2883 Fax www.franzen-salzano.com

Scott King, Partner Jacobs & King, LLC 1117 Perimeter Center West, Suite W-501 Atlanta, Georgia 30338 404-920-4490 404-920-8670 Fax scott@jacobsking.com www.jacobsking.com

Jennifer W. DeBaun Associate Casey Gilson P.C. Six Concourse Parkway Suite 2200 Atlanta, Georgia 30328 770-512-0300 Ext. 528 770-512-0070 Fax jdebaun@caseygilson.com www.caseygilson.com

GIADA has developed a Dealership Red Flag Written Policy in outline MS Word format for a small size  operation. Many of our members have taken this outline and customized it to fit  their specific business model. GIADA is happy to share this document with only GIADA members. Just send an email to monicac@giada.org to request a Dealership Red Flag Written Policy for you to use. If you have any questions about developing your  company Red Flag written policy please give me a call.  Paul John – 770-745-9650 or paul@giada.org.

These  documents are intended to explain, as well as provide  compliance  information. They are not intended to address the specific  facts and  circumstances of every motor vehicle dealership. Specific  applications  will vary depending upon how a motor vehicle dealership  transacts  business.

The Federal Trade Commission  and the federal  financial institution regulatory agencies have published  final rules on  identity theft “red flags” and address discrepancies.  The Final Rules  implement sections 114 and 315 of the Fair and Accurate  Credit  Transactions Act of 2003.

We have developed materials to assist  Dealers in  complying with the Rules. These materials are being provided  to you for  distribution free of charge.

• An  Overview Memorandum of the Red Flags Rules
• A  copy of the Rules (256 pages)
• Guidelines  to assist your dealership in analyzing identity theft red flags and  developing a written program;
• A  model written dealership policy for the detection, prevention and  mitigation of identity theft;
• An  employee acknowledgment regarding the Dealership’s identity theft  program;
• A  service provider agreement addendum regarding the Dealership’s identity  theft program;
• A  service provider letter regarding the Dealership’s identity theft  program.

Please keep in mind that these materials are  designed to  assist dealers in the development of a written dealership  policy for the  detection, prevention and mitigation of identity theft  and are intended  to serve as a guide. While not intended as a universal  solution that  every dealership can adopt, since they are drafted from a  used motor  vehicle dealer’s perspective, NIADA members should find  that they are  easy to use and customize for their dealerships. They may  wish to  consult with their legal counsel or other professional  consultants to  ensure that their dealership policies are appropriate  and in compliance  with applicable federal and state laws, rules and  regulations. The  information contained in this document and the  additional materials  provided are for general information purposes only  and should not be  considered as legal advice.

22) New FTC Privacy Statement

The New FTC Privacy Notice. Dealer mandatory compliance by 01/01/11Privacy is a central element of the FTC’s consumer protection mission. In recent years, advances in computer technology have made it possible for detailed information about people to be compiled and shared more easily and cheaply than ever. That has produced many benefits for society as a whole and individual consumers. For example, it is easier for law enforcement to track down criminals, for banks to prevent fraud, and for consumers to learn about new products and services, allowing them to make better-informed purchasing decisions. At the same time, as personal information becomes more accessible, each of us – companies, associations, government agencies, and consumers – must take precautions to protect against the misuse of our information.The Federal Trade Commission is educating consumers and businesses about the importance of personal information privacy, including the security of personal information. Under the FTC Act, the Commission guards against unfairness and deception by enforcing companies’ privacy promises about how they collect, use and secure consumers’ personal information. Under the Gramm-Leach-Bliley Act, the Commission has implemented rules concerning financial privacy notices and the administrative, technical and physical safeguarding of personal information, and it aggressively enforces against pretexting. The Commission also protects consumer privacy under the Fair Credit Reporting Act and the Children’s Online Privacy Protection Act. Use the topic links on the left to read more about our efforts in each of these areas, including what we’ve learned, and what you can do to protect the privacy of your personal information.Dealers who distribute privacy notices to their customers must be using the new FTC Privacy Notice as of 01/01/11. GIADA has taken the FTC Model Privacy Notice Form and formatted it for general use to accommodate the typical independent auto dealer. You will want to retain a signed copy of this form for your records and proof the notice was given to the customer. Depending on your particular business model and practices, modifications may be required to this privacy notice if for an example you routinely share customer information with other entities. Sample: GLB Customer Privacy NoticeClick Here to purchase form GIADA GLB-2  (Consumer Privacy Notice)Package of  50 – Double  sided  -  Member price:  $19.89  -  Non-member price:  $28.41

Price excludes tax and  shipping.

DISCLAIMER NOTICE: The information in this document is intended for  information purposes only and does not constitute the giving of legal or  compliance advice to any person. Because of the generality of this  update, the information provided in this document may not apply to all  situations and should not be acted upon without specific legal advice  based on your dealership’s particular situations from a knowledgeable  attorney or compliance professional licensed to practice in your state.

21) Risk Based Pricing Rule Compliance

The new FTC Risk Based Pricing Rulewent into effect January 1st, 2011. It is important that you determine if these new rules apply to you because of the way you do business. GIADA has developed an easy to understand FAQ’s. (Frequently Asked Questions)   Reading through the FAQ’s will help you determine if your business model requires you to distribute one of the new FTC Risk Based Pricing Rule Notices. Samples of these forms are provided in this section.FAQ’s for Risk Based PricingSample: B-1 (Risk Based Pricing Notice)Sample: B-4 (Credit  Score Disclosure Exception Notice)Sample: B-5 (Credit  Score Not Available Notice)GIADA B-1 (Risk Based Pricing Customer Notice) Package of 50 2-part NCR carbonless single sided Member price: $19.36 Non-member price: $27.57GIADA B-4 (Credit Score Disclosure Exception Notice) Package of 50 2-part NCR carbonless single sided Member price: $19.36 Non-member price: $27.57GIADA B-5 (Credit Score Not Available Notice) Package of 50 Single sided Member price: $11.12 Non-member price: $15.89
** All forms prices exclude sales tax and shipping

To purchase any of these forms click here and you will be directed to our on-line store.

Here is an easy to understand article written by an attorney that explains the new rules. GIADA members are encouraged to call Paul John at GIADA with any questions or concerns. We are here to help our members. 770-745-9650 or 800-472-8101. or email: paul@giada.org.READ THIS ARTICLE: Effective January 1, 2011, dealers will be subject to the FTC’s Risk-Based Pricing Rule. The idea behind this Rule is that certain customers get worse deals because of bad credit and they should know that.  So a creditor who uses a consumer report and “grants, extends, or otherwise provides credit to that consumer on material terms that are materially less favorable than the most favorable terms available to a substantial proportion of consumers from or through that person” either has to give these customers a risk-based pricing notice or give an “exception notice” to every consumer who applies for credit through the dealership.

For indirect auto finance, auto dealers have to give risk-based pricing notices or implement the exception notice process discussed below. Oral risk-based pricing notices are permitted but written notices are recommended and the exception notice must be in writing.  The Rule does not apply to lease transactions or business credit.

If you are going to give a risk-based pricing notice to customers you finance, the first task is to identify who should get a notice.  The “material terms” element of the rule means the APR or, in the case of credit that doesn’t have an APR, “”the financial term that varies based on information in a consumer report and that has the most significant financial impact on consumers such as a deposit….”  You don’t have to give a notice if the customer applied for specific credit terms and you give them exactly those terms like a promotional APR.
While there are a number of ways to comply with the Rule, most dealers will use one of two: i)  give a risk-based pricing notice to certain financed customers based on the “credit score proxy” notice method; or ii) give an “exception notice” to every consumer who applies to your dealership for financing.  The FTC and the NADA recommend but don’t require using the exception notice.  Let’s briefly discuss both.

The way the “credit score proxy” notice works is that you do a representative sampling of your completed deals from the past two years (you must do this separately for new vehicle credit and used vehicle credit).  You then identify a cutoff credit score representing the credit score at which approximately 40% of your customers have higher credit scores and approximately 60% of your customers have lower credit scores. (say 632 for example).  You then must give a risk-based pricing notice to every new customer you finance whose credit score is lower than the cutoff score (632 in our example).  The notice has mandatory language you must use.  Special rules apply if you use more than one credit score in setting the material terms of credit. You must recalculate your cutoff credit score no less than every two years if you used a two-year representative sample or one year if you didn’t have two years of deals to sample. You must also give any customer who does not have a credit score a different notice.

Customers who get these risk-based pricing notices are entitled to a free credit report much like a customer who receives an adverse action notice.

The “exception notice” doesn’t require you to give a risk-based pricing notice to anybody.  But it does require you to give a written credit score disclosure notice to every consumer who applies for credit through your dealership even if you don’t finance them.  Consumers who receive this notice are not entitled to a free credit report other than the annual free credit report all consumers can get from each credit bureau at the site, http://www.annualcreditreport.com/

The exception notice tells the consumer their credit score, the source of the credit score, the date the score was created and contains other mandatory disclosure language. It also has to provide information about the percentage of U.S. consumers who have lower and higher credit scores than the consumer, either by using a bar chart of credit score distribution ranges or by telling the consumer where their credit score falls in the national range of consumer credit scores. If you use this exception notice, give this notice to each credit applicant as soon as reasonably practicable after you obtain their credit score but before you consummate the transaction. Use the same notice for consumers without credit scores as described above. If you use the exception notice, you will have to obtain a credit score and a notice form from a credit bureau or other provider showing the national range of credit scores or indicating where the consumer’s credit score falls in the national distribution of scores.

Whatever notice procedure you use, keep a copy of the notice you give in the deal jacket to document your compliance with the rule.

Randy Henrick is Associate General Counsel and lead Compliance Counsel  for DealerTrack, Inc.  He is also Chairman of the New York State Bar  Association’s Consumer Financial Services Committee.  This article is  intended for information purposes only and does not constitute the  giving of legal or compliance advice to any person. Because of  the generality of this update, the information provided in this article  may not apply to all situations and should not be acted upon without  specific legal advice based on your dealership’s particular situations  from a knowledgeable attorney or compliance professional licensed to  practice in your state.

20) Your Own “Lot Audit” Are You Compliant?

Car dealers are constantly under scrutiny by not only local and state regulators, but also on a Federal level as well. GIADA helps its members stay compliant and through proper education dealers can avoid staggering penalties and fines. Members, please call one of our capable staff members whenever you have any type of legal or compliance questions. While we are not attorney’s, we have the expertise and answers you need. If not, we will refer you to one of member attorneys for guidance.Take the self audit test. Can you answer YES to each questions? Print Lot Audit

19) O.C.G.A. § 10-1-32 – Motor Vehicle Sales Financing

Dealer Legal Compliance

TITLE 10.  COMMERCE AND TRADE

This statute  also explains how late fees may be charged. This  statute also explains how late fees may be charged.

18) The Governors Office of Consumer Affairs – Deceptive sales practices

Dealer Legal Compliance

The  Governors Office of Consumer Affairs Understand the rules and  avoid possible steep penalties The Governors Office of Consumer Affairs, (G.O.C.A.) monitors  and regulates how companies advertise their products. Since auto dealers  routinely advertise in  various ways including on-line, dealers are well advised to make sure  that they understand the rules. Penalties for  deceptive advertising can be rather severe. The G.O.C.A. and GIADA are  working together to properly inform and educate dealers about acceptable  and legal advertising. The G.O.C.A.’s just released information about  he top 15 most common advertising violations and the new G.O.C.A. Auto  Advertising and Sales Practices Enforcement Policies. Don’t hesitate to  call the GIADA office if you have any questions. Advertising Traps For The Unwary, by Attorney Terry Franzen Top 15 Most Common Advertising Violations For Car Dealers G.O.C.A. Auto Advertising and Sales Practices Enforcement  Policies

17) Endangering Security Interest Statute

Dealer Legal Compliance

16) Dealer Temporary (Drive-out) Tag Laws

Dealer Legal Compliance
Dealer Temporary Tag Laws

15) Dealer Tag Usage Laws

Dealer Legal Compliance

Dealer Tag Usage Laws Dealer Tag Usage Statute 40-2-38 DMV Dealer Tag RulesCODE: 40-2-38. A dealer may use or permit to be used a dealer’s  number for private use on vehicles owned by the dealership,  regardless of whether such vehicle has been issued a certificate of  title or registered, when such vehicles are operated by an employee or  corporate officer of the dealer which has been issued such number. A  distinguishing dealers number used by an employee or officer for private  use shall authorize such person to operate the vehicle to which the  number is attached on the public highways and streets. For purposes of  this paragraph, “employee” means a person who works a minimum of 36  hours per week at the dealership.