On Tuesday, Aug. 30, at Paris Las Vegas, 83 industry professionals sat for the Certified Automotive Compliance Professional exam, offered for no charge to Compliance Summit attendees by Automotive Compliance Education (ACE). The following week, Agent Entrepreneur met with Gil Van Over III, the organization’s executive director, to learn more about the program and Van Over’s career in auto finance, training and consulting.
AE: Gil, where are you from?
Van Over: I’m proud to say I’m an Air Force brat. I’ve lived everywhere from the Orient to Europe to the United States. I went to high school in Hawaii and Dayton, Ohio, if you can believe that.
AE: What was your favorite stop?
Van Over: My favorite was Hawaii, but I finished high school in Dayton and then went to Ohio State for a couple years. Then I decided to join the business world. I went to work for a finance company and then went to one of the captives. From there, I was hired as the COO of Premier Auto Finance, which was a Pat Ryan or Aon company. Finally, I started gvo3 & Associates in 2001.
AE: What spurred the move from finance to compliance?
Van Over: At Premier, we were struggling with the manufacturers offering zero percent financing. It was hard to compete anymore. So we decided to shut it down and I decided to go into business for myself, offering compliance solutions, including training.
AE: Compliance was not the hot-button issue in 2001 that it is today.
Van Over: I kind of grew with the times. The timing was fortunate.
AE: How do you keep up with changes to rules and regulations at the state and federal levels?
Van Over: I read a lot of industry publications and I keep track of pending legislation and court decisions that require a dealer to have a plan in place. From that, I apply the methodologies I learned at the captive to incorporate those types of things as processes. We’re a process-improvement company. We use audits as a core competency to deliver consulting. That’s driven by processes, processes, processes. If they’re doing it right, they’re doing it right consistently. If they’re doing it wrong, they’re doing it wrong consistently.
AE: Are dealers and F&I professionals more receptive to change now than they were when you started?
Van Over: There has been a huge growth in awareness around the industry over the past 15 years. In the beginning, I had to spell “compliance.” Now, most people have a better understanding of what it is. The problem is that it’s so voluminous, they don’t know how to manage it.
AE: So you leave it to the experts.
Van Over: Exactly. I can tell you, for example, that the CFPB is focused on this aspect of your business and this is how you can demonstrate you are in compliance. It’s transitioning what you have to do into how to do it. That’s been the biggest key to our success.
AE: Do you still encounter F&I managers who play ball while you’re in their dealership and then go back to what they were doing when you leave?
Van Over: You run the gamut. You’ve got the people who think they’re too small or too isolated or insulated to have to worry about it. You run into the people that are saying, “Well, I’ve been at 17 dealerships in the last seven years, so whatever I’m doing, I won’t be here when the bad news comes.” And you do have the people that are just waiting for you to leave. They know you’re not coming back for six months or a year and they can go back to doing what they’ve always done.
But for the most part, the people working in the industry today understand that it’s the right thing to do for the customer, and it’s simply good business. You can keep the products you’ve sold because they’re not going to be canceled. You will have a higher degree of return customers. I think most people want to do the right thing. They need help understanding what the right thing is.
AE: Will your job get easier as the industry gets younger?
Van Over: That’s a good question. I’ll say there are a lot of urban myths out there and there always have been. Only now, what once was communicated by fax or phone is now on social media, and everyone’s opinion can be heard. You can’t just take a 144-character tweet as gospel, but many younger people do.
AE: We keep hearing about banks and finance companies knocking on dealers’ doors to perform surprise audits, but I have yet to speak to a dealer who has been through one. Is that actually happening?
Van Over: It’s not necessarily your finance company coming into your dealership and doing an audit but statistically reviewing portfolios. Most finance companies will have basically the same escalation process followed by HR professionals: First, you identify the issue and come to an agreement. If the offender doesn’t stick to the agreement, you follow with a written notice. If it still doesn’t correct itself, after determining the level of risk is too high, your finance source will say they can no longer do business with you. It’s not an overnight thing.
AE: Speaking of overnight, we’re fresh off Compliance Summit, where you and Jim Ganther and Michael Tuno presented the review session and proctored the exam for ACE certification. Ganther hinted that you pulled a few all-nighters to get the materials done in time for the show.
Van Over: He’s right about that, but I wouldn’t want anyone to think we threw that curriculum together in a few days. This idea first germinated in my mind about five years ago. I told Jim that there’s an opportunity for us to provide a certification for the industry that would leverage a lot of factors and, more importantly, provide some best-in-class certification that would rival what other professions get.
Think about doctors, nurses and teachers. They all have a requirement to not only get their degree and license but participate in continuing education to make sure they stay current. We didn’t see any offerings in the industry that met that standard.
So we had everything in place, but we still had to finalize some of the details, and that part happened fast. But we had the opportunity to introduce it to a great audience at a great venue.
AE: To use your own word, compliance is a “voluminous” topic. How did you lasso all aspects of dealer compliance into four hours of review and a 200-question exam?
Van Over: First, we understand what we’re good at. We’re good at compliance with all of the rules, regulations and statutes for best practices that revolve around sales and F&I. Dealerships also have parts and service departments, but we don’t pretend to be good at OSHA. What we’re good at is the departments that square off with the customer.
I do a lot of litigation support, so I see the arguments for unfair and deceptive practices. We have developed best practices. We generate the documentation that shows you were not deceptive in the way you sold anything.
We talked about continuing education for the practitioners in the dealership. We certify all of them because they all have a role in compliance. Just as they need to stay on top of the situation, we do as well. Continuing education is the key.
AE: Now that I’m certified, how do I get recertified?
Van Over: Every year, on the anniversary of your certification, you will receive a notification from ACE that you need to log in and take a smaller number of modules to stay certified. There are five we have identified that should be done annually: Safeguards Rule, Red Flags, sexual harassment, discrimination and ethics. Additionally, every year, we will add any modules that have been added to your discipline’s curriculum.
Finally, if you’re a gvo3 client, you are getting regular periodic reviews, and we will include areas where we see the highest area of noncompliance. If we find the highest percentage in the completion of credit applications, for example, we’ll include that module and do it again.
This demonstrates that, not only are we keeping you current on recent changes, we are also reviewing deal files, identifying failure points and retraining on that. With that documentation, the dealer has a strong case if someone leaves and blows the whistle. Sorry, but you were trained. We showed you how to do it the right way.
AE: Is it possible to be fully compliant and still be unethical?
Van Over: You can have paperwork in the deal that suggests you did things the right way. But, yes, you can still be unethical. And if you are, eventually, it’s going to catch up with you. We have a philosophy we share with dealers in our recap meetings: If you’ve made mistakes, it’s one of two things: You are naïve or you’re a kink. I can fix naivety. If you’re a kink, and you’re forging signatures and packing payments, and you think that’s acceptable, your moral compass is off. I can’t fix that.
AE: How often have you had to recommend that a dealer fire a bad actor?
Van Over: It happens occasionally. But it’s happening less and less, and we’ve moved along further into the progression of the company. When we develop a policy and procedure manual for our clients, we include a list of eight or nine non-negotiables. If you violate even one, you’re terminated. If you forge a document, you’ve got to go. If you steal money, adios.
However, we make absolutely certain we’re an independent contractor. We are not making decisions on behalf of the company. We might point out that it looks like someone else signed this document, and the dealer will investigate that. Many times, if they can get someone to admit to it, they do terminate them.
AE: Our readership is agents, so let me ask you: What responsibility do agents bear for keeping dealers in compliance?
Van Over: Agents do not want to be the dealer’s compliance cop. We’ve made that very clear. We work with more than a few agents, either on a referral basis or when we have been retained to be the compliance cop. We tell them to be sure their processes are compliant. Train on the menu from both the sales and compliance perspectives.
But you don’t want to be the guy reviewing deals. Focus on production. If your dealer needs a compliance expert, there are a number of us out there, and some of us do a very good job. Get somebody to be your compliance cop. Agents are there to help dealers make money. That’s what they’ve got to focus on.
For more information about ACE certification, visit AceCert.org. For more information about gvo3 & Associates, visit gvo3.com.