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F&I checklist and tips for better compliance

There are some easy ways to both be sure current staff is well versed in compliance and that your new hires are too.

Every F&I manager has that thing that’s a perpetual thorn in their side. That thorn is compliance.

It’s probably unfair to describe compliance so negatively but it becomes tedious when there are so many regulations coming from different channels…Fed, state, financial companies, etc. It’s a lot.

It can also be challenging to make sure F&I staff new hires are also knowledgeable in compliance best practices. How would you know? You could ask about this in interviews but never be sure if their answers prove they do or not.

There are some easy ways to both be sure current staff is well versed in compliance and that your new hires are too.

Scheduled Audits (Weekly, Monthly, Quarterly)

F&I is the most regulated department at the dealership. Financial disclosures, fair lending practices, identity fraud concerns, proper income reporting, etc. make it easy to have something get missed causing not only a potential legal nightmare but damage to your reputation in the community.

Consider having regularly scheduled audits to review deals at random. This approach gives a more general look at how F&I managers are performing throughout the year and can help you spot staff that may have more issues than others.

Doing an audit more frequently (if your store is busy) can work as well to help catch and correct issues before they build over time. Staff can be retrained faster and there is less chance for any damage if it’s only a couple of deals where something was missed.

Keep Vets’ Skills Up

Ask your current F&I provider if they have a compliance training program that can be executed once or twice a year for staff. That helps if there is turnover throughout the year to keep new F&I staff trained faster.

Make sure it’s never presented as something punitive but rather as something that helps your F&I managers be as current as possible on any new changes. Like all required training, it’s meant to be something to help empower your staff, not overwhelm them.

Consider a Test for New Hires

If you want to know a candidate’s compliance knowledge quotient, consider giving them a test. You can give them a test deal and test to administer during the interview process which should give you a solid idea if they are ready for this element of the job.

Consider a test that touches on the following best practices, state/Federal laws, and deceptive practices:

  • Power booking
  • Payment packing
  • Menu presentation/execution
  • Red Flag
  • Truth in Lending
  • Credit App Fraud

Compliance Checklist

A standard checklist for each deal makes compliance even easier to stay on top of.

It should check for:

  • Identity documents (complete, proper form)
  • Contracts (executed in the proper place, no unclear items added)
  • Credit Application (proper execution, filled out completely)
  • Money Down (payments of any type executed according to protocol)
  • Other Items (customer signatures on everything else that is required by your dealership, DMV, banks like privacy notices, buyers guide, credit score disclosures, and a Vehicle History Report like Carfax or Autocheck if run on a used car)

You may think every F&I manager has all rules and regulations committed to memory, but the reality is that there may be one or two things missed and no dealership can afford to have that that become a trend. Get out ahead of it with regular audits and SOPs surrounding compliance to help it become second nature to your entire F&I staff.

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Kristine Cain
Kristine Cain
Kristine Cain is a contributing writer for CBT News. She has over 26 years of experience in the automotive industry specializing in F&I and B2B sales.

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