LAKE SUCCESS, N.Y. — DealerTrack Inc., a subsidiary of DealerTrack Holdings Inc., has added functionality to its DealerTrack Performance Suite that will enable dealers to comply with the Federal Trade Commission’s new Risk-based Pricing Rule, which goes into effect on Jan. 1, 2011. The enhancements are available automatically for free to all dealerships on the DealerTrack credit application network.
The Risk-Based Pricing Rule requires dealers who use credit reports to issue a notice to customers who receive credit from them on terms that are less favorable than terms received by most of their other credit customers. Dealers do not need to determine who falls into this category if they simply issue to all their credit applicants a credit score disclosure “exception notice.” This notice includes the customer’s credit score and other information that puts the score in context.
With the new functionality, any dealership using the DealerTrack credit application network will be able to print credit score exception notices pre-filled with all required information, as well as exception notices on their lender’s behalf for two-party financing. In addition, dealerships subscribed to the DealerTrack Compliance Solution will be able to electronically store and view status reports on all exception notices generated by their dealership though the solution’s dashboard and audit tools.
“We’re very pleased to further expand DealerTrack’s leading F&I offerings by including risk-based pricing functionality at no additional charge,” said Raj Sundaram, senior vice president, Solutions and Services Group at DealerTrack. “These and other enhancements underscore our ongoing commitment to providing dealers with the industry’s most comprehensive package of compliance capabilities, thus reducing their exposure to legal and regulatory risks.”
Dealers who do not comply with the new Risk-based Pricing Rule are subject to potential fines of up to $16,000 per violation, as well as possible penalties at the state level. The FTC is also scheduled to begin enforcement on Jan. 1 of the Red Flags Rule, which requires dealers to take steps to detect and prevent identity theft. DealerTrack’s Compliance Solution includes tools to help dealers comply with the Red Flags Rule as well.