By Terry Dortch

The next time you find smooth driving ahead, pull over for three minutes and review the common compliance potholes dealers often miss while running their business.

If you drive in a big city where road construction is a fifth season or where winters are brutal, you know the skill required to navigate congested and furious traffic as you watch for and dodge road surface potholes and hazards.

So next time you find smooth driving ahead, pull over for three minutes and review the common compliance potholes dealers often miss while running their business.

So, in no particular order, easy-to-miss compliance potholes to watch for and avoid:

  1. Spanish-language documents: Be sure you know what your state requires. California, Texas, Nevada and a few others require customers be provided a copy of the contract they sign in the language in which it was negotiated. Others, like Illinois, require a disclosure to be signed by the customer when the agreement is negotiated in a language other than English. As precaution, provide a Spanish copy of the contract where the deal is negotiated primarily in Spanish. The Federal Trade Commission requires the Used Car Buyers Guide to be posted on the vehicle in Spanish before you negotiate a used car transaction in Spanish. The Spanish-speaking customer must also be provided a copy of the Spanish Buyers Guide.
  1. Adverse Action notices: The Equal Credit Opportunity Act (ECOA) requires creditors who take “adverse action” on consumer credit applications to provide a “statement of reasons” for the adverse action. Adverse Action notices need be sent to anyone applying for credit and is denied. Or, when the terms differ from that requested. Usually the bank with which the dealership has pursued financing for the customer will produce and distribute this notice. Where the dealer makes the credit decision or denies credit without shopping the application to a bank or finance company, the dealer must take the action.
  1. Police Book or Wash Out system: Hardbound book or electronic system, the Police Book is required by state DMVs for dealers to note vehicle bought-sold records. Record-keeping requirements differ by state. Consult your association or DMV. The Police Book or software-based system must track new and used vehicles, essential parts, rebuilt vehicles and junked vehicles. Their inspection is subject to law enforcement and DMV investigators at any time. 
  1. OFAC: The Office of Foreign Asset Control, this simple rule requires the dealer match the name of any purchaser individual or corporate against the SDN list, the Specially Designated Nationals List. The SDN is a list of known people and organizations we are forbidden to transact any business with. The ones on this list are considered either money launderers, drug dealers, or terrorists. 
  1. OSHA 300 logs: Under OSHA’s recordkeeping regulation, certain covered employers must prepare and maintain records of serious occupational injuries and illnesses using the OSHA 300 Log. This information is important for employers, workers, and OSHA in evaluating the safety of a workplace, understanding industry hazards, and implementing worker protections to reduce and eliminate hazards. As of January 2015, new and used car dealers have had to maintain and keep OSHA 300 logs and post them. Should OSHA show up at your door, this log is likely the first document they will request – and your first opportunity to demonstrate your commitment to regulatory compliance and employee safety. 
  1. Lift Maintenance: Have service and body shop lifts inspected annually. Inspections should include the hydraulic system, valves, hoses, cables, chains, pins, spindles, the electrical system, ramps, runway stops, locks, and safety features. Compile and properly maintain all lift maintenance records. An unbiased third party typically performs superior inspections and identifies actual and potential areas of concern. These can be corrected and lifts can be in good working order should OSHA suddenly stop by. A place to start is review of the maintenance documents. A next sound step is to commission your own inspection. A qualified individual with extensive knowledge of all the various kinds and manufacturers of lifts should conduct these inspections. Lift operators should receive refresher maintenance and safety training. People who operate lifts must be trained on the lift they use. Keep records of all training, too.
  1. NPI security: Managing NPI (nonpublic information) records is mandated by the Federal Trade Commission FTC and the Gramm-Leach-Bliley Act (GLB) or Privacy Rule. This information will include data you collect for customer transactions for work orders, service invoices, parts invoices, and other common dealership documents – any upon which non-public customer information will appear. You must safeguard this data by securing from public view and public access. When not done in compliance, you enable anyone with a camera-equipped smartphone to capture NPI data that can put your business and its customers at risk.

About the author: Former auto dealer and operator, Terry Dortch is president of Automotive Compliance Consultants, Inc. Providing dealerships with complete compliance solutions Reach him at