Total Dealer Compliance shows the impact of offering a clear complaint resolution has on sales and reputation

Total Dealer Compliance (TDC), a car dealership compliance-auditing firm, today announced key findings from its latest auto dealership survey conducted online in September among 200 U.S. adults age 18+. With over thirty percent of respondents revealing that they have submitted a complaint to a dealership, the survey sets out to illustrate the importance of offering a clear complaint resolution process to consumers. Such importance further illustrated when sixty percent of consumers admitted that they were more likely to buy a car from a dealer if that process is apparent.

Unsurprisingly, among the survey’s key findings are results indicating that over fifty-five percent of consumers who have submitted a complaint were dissatisfied with the resolution provided. When asked what the biggest pain point was when submitting a complaint to a car dealership, over fifty percent said it was the car dealerships’ obvious lack of desire to resolve the issue. With the industry recognized for unfair, deceptive, and abusive practices, nearly eighty percent of respondents believe that customer satisfaction is of utmost importance to the dealership when they have a clearly stated complaint resolution process.

“Compliance and customer satisfaction go hand in hand. A clear complaint resolution process that is overseen by a compliance officer is the most effective approach to resolving customer complaints,” said Max Zanan, President of TDC. “Sheds a spotlight on why TDC audits and compliance training can help improve policies and procedures and positively impact customer satisfaction.”

Highlights from the consumer survey include:

• Over 30% of consumers have submitted a complaint to a dealership.
• Of those who have submitted a complaint, over 55% of consumers were dissatisfied with the resolution provided.
• Nearly 60% of consumers are more likely to buy a car if there is a clearly stated Complaint Resolution process.
• Nearly 80% of respondents think that customer satisfaction is of utmost importance to the dealership if they have a clearly stated Complaint Resolution process.
• Over 50% of consumers said that the biggest pain point when submitting a complaint to a car dealership is the dealerships’ obvious lack of desire to resolve issue.
• Nearly 75% of consumers submit complaints by calling their dealership over submitting a complaint online.

“Currently either a General Manager or a General Sales Manager handles customer complaints, which is counter-productive as it is hard to be objective especially when your salary depends on commissions from sales. A Compliance Officer is better equipped to handle complaints because their main objective is to protect the dealership,” said Zanan. “State and Federal agencies do not start investigating a car dealership for no reason, and we are delighted to offer a solution that will help dealerships avoid unnecessary headaches and expenses.”

Auto dealerships that are not compliant feel the impact directly in terms of their loss of profits and reputation. Without a comprehensive compliance training program, car dealers’ bottom lines are affected.

Studies show that more than 73% of consumers prefer dealing with dealership staff that has completed compliance training and has certificates of completion on display. And more than 80% of dealers think compliance training and implementation will improve their dealership’s reputation in the community and relationships with customers.

The average dealer is probably more afraid of consumer lawsuits than the compliance violations that lead to these lawsuits. Risks related to noncompliance affect the entire dealership, however, yet less than 25% of dealers employ a compliance officer.

Dealers should understand that a partial solution to total dealership compliance is not the answer. Federal regulations apply to all departments of a dealership, meaning that a comprehensive approach to compliance is the only way to improve the reputation of the dealership and change its organizational culture.

A compliance program should contain written policy, training, and activity requirements. These requirements should be easily identified and enforced because they involve regulations that, if not followed, can result in significant fines.

To improve dealership compliance, three areas should be addressed:

1. Employee training
2. Operational procedures
3. Audits and paper trails

1. Employee training

Dealerships should provide employees with online classes to better understand compliance rules, as well as compliance-related factors that affect their career growth. Training instills a culture of compliance and keeps employees accountable.

These online courses should be designed to provide comprehensive education on federal compliance regulations, best practices, and corresponding policies and procedures.

Every dealership should have an employee handbook that sets forth its internal policies and procedures. A dealership may even have specialized, job-specific policy manuals (F&I, sales, etc.). Having these materials available on the dealership intranet is a great way to help employees stay current with policy.

Also, when consumers know that dealerships have formal employee training policies, they feel more confident about the dealership.

2. Operational procedures

An example of operational procedures is having an identity theft prevention program (ITPP). It is imperative for a car dealership to implement an ITPP, because by the time an identity thief walks onto the showroom floor, the theft has already occurred.

Dealers should be prepared in advance if an investigator or plaintiff’s lawyer asks to see a copy of their ITPP. Dealers must train employees on the dealership’s operational policy, which must detail the dealership’s processes to detect and mitigate identity theft.

Online training programs are particularly valuable in helping employees understand identity theft.

Also, dealerships that can provide an electronic paper trail regarding identity theft issues and have a current ITPP report available help customers feel safer when handing over their confidential financial information.

3. Audits and paper trails

The Safeguards Rule requires dealerships to develop a written information security program (ISP) that includes a risk assessment, oversight of service providers, and regular reviews of the ISP’s effectiveness.

Having a compliant ISP provides a paper trail should your dealership get audited. In addition, hiring a third-party audit company is extremely beneficial to assess dealership needs, and no compliance program is complete without it.

For a dealership to remain competitive and be a top choice for consumers, it must be 100% compliant. By instilling a culture of compliance, a dealership will enjoy greater productivity and sales, and earn a more positive reputation.

Dealerships that remain noncompliant or only partially compliant remain at risk of incurring huge losses. Addressing the categories mentioned here will play a major role in reducing that risk.