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A Dealer’s Guide to Digital Compliance

August 2010, F&I and Showroom - Feature

by Joe Bartolone - Also by this author

As many dealers are learning today, the Internet presents a host of opportunities to communicate and sell to consumers. It combines aspects of print, television and radio advertising in an interactive environment. However, digital marketing also raises a host of interesting — and, occasionally, complex — questions about the applicability of the laws that were developed long before “dot-com” became a household term.

For most dealers, Internet sales departments can range from a single Internet manager to a full-blown business development center (BDC). Regardless of how you staff this department, every individual tasked with managing the dealership’s online presence is subject to the same rules and regulations. Let’s run through the digital sales cycle and identify several laws and regulations that you should consider when developing a compliance manual for the digital realm.

Internet Advertising

Many of the general principles of advertising law apply to Internet ads, but new issues arise almost as fast as technology develops. Your primary guide should be the Federal Trade Commission Act’s prohibition on “unfair and deceptive acts or practices,” which broadly covers advertising claims, marketing and promotional activities, and sales practices in general.

The FTC also has published several booklets to help you develop your rules of the road for advertising on the Web. “Dot Com Disclosures: Information About Online Advertising” is particularly useful. The 83-page booklet provides insight into the FTC’s expectations for online marketers. The main topics covered are:

■ How FTC regulations apply to Internet ads.

■ Clear and conspicuous disclosure in online ads.

■ How to apply certain rules to Internet activities.

The CAN-SPAM Act established rules for commercial e-mail usage, mandates for commercial messages, and put in place e-mail opt-out requirements. It also spelled out tough penalties for violators, with each violating e-mail sent to a consumer subject to a $16,000 penalty.

E-Mail Campaigns

If you use e-mail in your business, you should be aware of the CAN-SPAM Act of 2003. It was created to establish rules for commercial e-mail usage, mandates for commercial messages, e-mail opt-out requirements, and to spell out tough penalties for violations. In fact, each violating e-mail you send to your customers is subject to a penalty of $16,000. Let’s take a look at some of the key requirements:

■  Don’t use false or misleading header information.

■  Don’t use deceptive subject lines.

■  Identify the message as an ad.

■  Tell recipients where you’re located.

■  Tell recipients how to opt out of future e-mails from you.

■  Honor opt-out requests promptly.

■  Monitor what others are doing on your behalf.

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