By the time you read this, the FTC Safeguards Rule (Rule) will have been in effect for at least a month. The Rule, which was previously scheduled to go into effect last November, has been live since June 9, 2023. The Rule, in short, requires dealers to undertake a series of procedural, technical and contractual steps to protect consumer and other personal data.

Some, but not all, of the new standards require dealers to:

• Designate a qualified individual to oversee their information security program,
• Develop a written risk assessment,
• Limit and monitor who can access sensitive customer information,
• Encrypt all sensitive information,
• Train security personnel,
• Develop an incident response plan,
• Periodically assess the security practices of service providers, and
• Implement multi-factor authentication or another method with equivalent protection for any individual accessing customer information.

Dealers are encouraged to continue in their efforts to expeditiously comply with all the new requirements of the Rule but should consult with their attorneys, service providers and IT professionals about the potential impact of this deadline extension. If you have questions regarding whom to consult on this topic, please reach out to the NHADA at support@nhada.com or (603) 224-2369.

On the legislative front, NHADA and NADA are in support of catalytic converter anti-theft legislation (H.R. 621/S. 154). Catalytic converters are being stolen at increasingly higher rates due to their valuable metals, such as rhodium, platinum and palladium. Thefts reported to insurance companies have sharply increased over the past three years, and the National Insurance Crime Bureau estimates that these thefts increased by 1,215% between 2019 and 2022. The bipartisan “Preventing Auto Recycling Theft Act” (PART Act) (H.R. 621/S. 154) would help law enforcement combat this crime by providing a national framework that would mark catalytic converters, establish federal criminal penalties and create a more transparent market that deters its theft.

Reminder: use NADA and NHADA as a resource center for your professional development. NHADA has rotating webinars available at www.nhada.com/training, similar to NADA, which can be found at nada.org.

In addition to webinars, NADA has developed several downloadable guides on several different topics, a few of which are listed below:

• A Dealer Guide to the FTC Safeguards Rule (L43);
• A Dealer Guide to Electric Vehicles (SL46);
• Online Financing and eContracting (L61);
• Buying and Selling a Dealership (BM44);
• Preventing and Detecting Fraud (BM42);
• Federal Consumer Leasing Act Requirements (L34), and lastly;
• Voluntary Protection Products: A Model Dealership Policy (L60), when offered, sold and administered in a professional and consumer-friendly manner, these voluntary protection products (VPPs) can offer customers valuable protection against unexpected and potentially costly events such as floods, hail damage, theft, vandalism, vehicle accidents, mechanical breakdowns or the customer’s death, disability or unemployment. Conversely, a dealership’s VPP process that lacks these features can fail to provide this valuable protection, confuse and create a false sense of security for customers, result in litigation and/or administrative enforcement actions against the dealership, and undermine the goodwill of the dealership in the community.

Recently, this issue has hit close to home:

The Massachusetts Attorney General’s Office (Mass AG) announced a settlement with Hometown Auto Framingham, Inc. (Hometown Auto), resolving allegations that the auto dealership had engaged in unfair, deceptive and discriminatory pricing of add-on products, resulting in a $350,000 fine.

The Mass AG has agreed that Hometown Auto can comply with the add-on pricing provisions of the settlement by implementing the National Automotive Dealers Association (NADA) Voluntary Protection Products Model Dealership Policy (NADA Model VP Policy).

Lastly, mark your calendars for the 2024 NADA Show, taking place from February 1-4 in Las Vegas. This year, you could win all-access passes for your entire dealership and a chance to have your video showcased on the main stage every day of the event by sharing your video on social media with the hashtags #NADAShow and #DrivingTheFuture. More information on this contest can found by clicking the link below.

https://www.nada.org/nada/nada-headlines/attend/announcing-nada-show-2024-video-competition

If you have questions or would like to discuss any of the above in further detail, don’t hesitate to reach out to support@nhada.com or (603) 224-2369.