Tag Archive | "compliance"

Penn. Dealer Pocketed Customer Fees, Police Say

WILKINSBURG, Penn. — The owner and operator of Penn Avenue Auto Sales Inc. has been accused of taking money from at least 40 customers and not submitting title and registration paperwork and fees to Pennsylvania Department of Transportation, the Pittsburgh Post-Gazette reports.

Charges are pending against Phillip Vixman while police search for other customers who may have been swindled. After 30 days, the customers would be left with expired rear window temporary plates and temporary paperwork.

To read the full story, click here.

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Arrested Pa. Dealer Faces Additional Fraud Charges

WEST WHITELAND, Pa. — An auto dealer who was arrested in November for fraud offenses is facing additional charges after Pennsylvania State Police investigators uncovered several other alleged victims, Mainline Media News reports.

David C. Coughlin was initially charged with selling a woman’s 2012 Porsche 911 Turbo on consignment for $80,000 and keeping the money for himself. Police now believe Coughlin committed similar crimes involving six other vehicles through Car Connections USA, Inc., with the amount stolen totaling $122,875.

To read the full story, click here.

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RoadVantage Announces Turnkey Solution to Help Dealers Ensure CFPB Compliance

Austin, Texas – RoadVantage, a leading provider of progressive F&I programs for the automotive industry, today unveiled a web-based Compliance Management System (CMS) that helps dealers ensure their practices are compliant with standards set by the Consumer Financial Protection Bureau.

“The CFPB has stated that it expects to see a Compliance Management System in place in every supervised entity,” said Garret Lacour, CEO of RoadVantage. “The RoadVantage CMS offers a straightforward, effective way for dealers to address this need.”

According to the CFPB, elements of an effective compliance program include written policies and procedures, verifiable training on policy and compliance, monitoring and corrective action measures to ensure accordance with policies, a track-able complaint resolution system, and periodic review, revision and written reports via independent, third-party audits.

Created by attorneys specializing in dealership defense, the web-based RoadVantage CMS is a comprehensive solution that addresses these elements through four major components:

  • Policy Management
  • Online Compliance Training
  • Complaint Resolution System
  • Third-Party Compliance Audits

“The recent industry events involving the CFPB mean it’s more important than ever for dealerships to ensure they have a compliance system in place,” said compliance expert Gil Van Over, president and founder of gvo3 and Associates, a nationally recognized compliance consulting firm. “The RoadVantage CMS offers the framework to help dealerships ensure they are meeting CFPB requirements.”

“Dealerships are looking for a turnkey compliance solution that integrates with existing practices and enables dealers to easily evaluate and demonstrate compliance,” said Randy Ross, senior vice president of sales at RoadVantage. “Because the RoadVantage CMS is an online tool, it offers a convenient way to foster compliance.”

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WCDS President Michael Tuno Achieves Second Tier of Master Certification

COLLEYVILLE, TEXAS – Michael A. Tuno, founder and president of World Class Dealer Services (WCDS), joined the ranks of a handful of professionals who have advanced to the second round of the Association of Finance & Insurance Professional’s (AFIP’s) master certification program. Tuno first attained master status two years ago when AFIP introduced the top-level curriculum in 2012.

“Compliance has always been at the core of WCDS products and services,” said Tuno. “Master certification helps me provide our dealer clients not only with a better understanding of the rules, but also best practices in the evolving regulatory environment.”

Tuno founded WCDS, based in Quakertown, Pennsylvania, in 2003. The full-service agency provides finance and insurance products and resources to automotive, recreational vehicle, powersport and heavy truck dealers in the mid-Atlantic region.

Before WCDS, Tuno gained 18 years of experience in F&I. He logged six years in retail sales, F&I and sales management; three years in automotive banking; nine years in sales and management with Universal Underwriters Group; and one year as Vice President Franchise Sales with the Guardian Warranty Corporation before launching his own company.

Tuno has contributed to numerous trade publication articles and has been a speaker and panelist at NADA and RVDA national conventions. He was an instructor for F&I with the NADA Automobile Dealer Candidate Academy and currently serves as an instructor for F&I with the NADA American Truck Dealer Candidate Academy.

Tuno holds a Bachelor of Arts degree from Dickinson College, an MBA in Marketing in the Automotive Industry from Temple University, and completed the Executive Management Program at the J.L. Kellogg Graduate School of Management at Northwestern University. He earned his initial AFIP certification in 1996 and his senior certification in 2009.

“Michael Tuno is a leader in the field of F&I,” said David Robertson, AFIP executive director. “It’s fitting that he’s in the first wave of second-tier masters – they are the vanguard of their profession. Their commitment to excellence and ethical conduct embody what it means to be a true professional.”

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Federal Judge Dismisses GAP Coverage Lawsuit

BALTIMORE — A federal judge threw out a proposed class-action suit last month against the Pohanka Auto Group, which claimed the dealer group’s GAP coverage was “phony” because it did not meet the definition of a debt-cancellation agreement under Maryland law.

Judge Deborah K. Chasanow dismissed the putative class action against Pohanka’s 11 dealerships because the plaintiffs, Eunice and Barbara Jones, did not suffer a loss of their vehicle — a used 2007 Mercedes-Benz C230 they purchased from Pohanka Isuzu in 2008. The court also found that the plaintiffs did not show that they were harmed by all 11 dealerships named in the lawsuit.

According to the complaint, the Jones purchased a $750 GAP product, which they claimed was not a “true” debt-cancellation agreement under the Maryland Credit Grantor Closed End Credit Provisions (CLEC) because it would not necessarily pay off the remaining loan balance if the vehicle was totaled or stolen.

“According to the complaint, ‘[t]he phony GAP agreements … only agree to relieve the borrower of the obligation to pay the difference between the ‘value of the vehicle’ and the amount owed on the financing contract,’ which plaintiffs presumably believe will be less than the remaining loan balance in the event of total loss,” Chasanow wrote in her memorandum.

In the case of the Pohanka Auto Group’s GAP coverage, the value of vehicle is determined by either the insurance company or the book value of the vehicle — whichever value is higher. Under this policy, the consumer could get less money than the total remaining loan balance because they would only receive the difference between the higher value and the amount owed on the financing contract.

Judge Chasanow noted that the contract the plaintiffs signed did incorporate language from the CLEC, but she said Maryland dealers can’t be held liable for any inconsistencies in the language of the GAP contract as long as claims are honored according to state law. And because the plaintiffs never made a claim, she ruled there was no violation of the CLEC.

The Jones also alleged that because the Pohanka Auto Group was selling “phony” GAP coverage, it had created a “conspiracy.” Chasanow found that the Jones did not have the right to sue any dealership other than Pohanka Isuzu, which is now closed.

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Biweekly Payment Provider Bulks Up Compliance Practices

ORLANDO, Fla. — US Equity Advantage (USEA), a provider of biweekly loan processing for the automotive industry, has added two new components to its compliance practices: a code of ethics and certification test for dealership partners. They are designed to further enhance the consumers’ understanding of the costs and benefits associated with the company’s biweekly loan payment services.

The code of ethics is an agreement signed by dealership finance managers. It is intended to demonstrate the commitment of their F&I personnel to operate in the customers’ best interests by fully disclosing in a clear and simple manner the costs and benefits of USEA’s biweekly loan payment services.

The certification test is an online exam for F&I professionals at dealerships to test their knowledge of USEA’s biweekly payment plan costs and benefits. They must successfully complete the exam in order to offer USEA’s products to their customers.

“The code of ethics and certification test represent a continuing evolution of our best-in-class business practices,” said USEA CEO Robert Steenbergh, who also serves as the company’s chief compliance officer. “With the recent regulatory attention given to biweekly payment products, it is more important than ever that we have practices in place that promote full and accurate disclosure of our products and puts the customers’ best interest first and foremost.”

The announcement follows a memo the National Automobile Dealers Association issued in May. It warned members that the FTC issued civil investigative demands to dealers in connection with the sale of biweekly payment products. It also cautioned dealers not to overstate the benefits of biweekly payment services.

“USEA is in lockstep with the National Automobile Dealers Association (NADA), which has advised its members to be aware of the specifics of the F&I products they sell and ensure their staff are properly trained to accurately disclose all fees and costs and not overstate any potential benefits,” Steenbergh said. “Our new compliance initiatives give USEA’s dealership partners the tools to do exactly that.”

USEA’s commitment to compliance also includes a fulltime compliance officer whose department is actively engaged in meeting all regulatory issues in the marketplace. These include adhering to state money transmission licensing in all 50 states, Bank Secrecy Act/Anti Money Laundering (BSA/AML) regulations, ACH network operating rules and guidelines, Electronic Funds Transfer Act (EFTA) requirements related to customers’ transactions, the Gramm Leach Bliley Act (GLBA) governing customer privacy and security, and Generally Accepted Accounting Principles (GAAP) including annual financial auditing.

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