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Compli Releases “Red Flags” Content for Dealers in Collaboration with Hudson Cook LLP

February 19, 2008

Portland, Ore. — Compli, in collaboration with Hudson Cook LLP, released a new “Red Flags” Compliance Program which is available free of charge to clients of Compli’s Dealership Compliance Management System (DCMS).

Compli’s DCMS reduces the growing regulatory burden on dealership operations. The DCMS is a compliance automation solution that combines automotive legal content from subject matter experts like Hudson Cook LLP with automated best practices to create turn-key “good faith” compliance programs for automotive dealerships.

The new “Red Flags” program specifically addresses the content and training requirements associated with “Red Flags” compliance for dealerships. Dealers have traditionally relied upon disparate manual processes to verify a client’s identity. However, with expanded federal rules and guidelines specific to identity verification and ID theft prevention, car dealers are required to implement an Identity Theft Prevention Program that identifies and addresses “Red Flags,” which are patterns, practices or specific activities that indicate the possible existence of identity theft.

“Red Flags” dealers should consider may arise from their own experiences with identity theft, as well as the 26 examples of red flags described in the new rule. Because of the subjectivity involved in implementing an effective Identity Theft Prevention Program, there is a need for comprehensive and continuous training beyond that which dealers have historically undertaken.

According to the new “Red Flag” rules, dealers must put new processes in place that identify patterns, practices and credit activity that suggest the existence of identity theft. These "Red Flags" are intended for use as part of a dealer-specific, identity theft detection, prevention and mitigation program.

Compli’s New “Red Flags” Program consists of:

-“Red Flags” Program Overview

-“Red Flag Rules” Policy

-“Red Flags” Internal Audit Form

-“Red Flag Rules” Interactive Assessment

-Legal Article: “Red Flag Warning” by Michael Benoit of Hudson Cook LLP

-Online Link Library with “Red Flag” online resources

“The new Red Flags rule is just another example of the increased regulatory burden being imposed on auto dealers. The objectives are sound, but new requirements like these are increasing the need for dealers to reconsider their operational compliance structure, as well as their training and support functions. In working with Compli on this new “Red Flags” program, our goal is to provide pertinent and relevant information to help U.S. dealerships better understand their “Red Flag” rules obligations so they can take the steps necessary to implement effective compliance standards in their dealerships,” said Benoit.

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