Is Your Salesperson Running a CRO?

A few years ago, the esteemed Jim Ziegler penned an article for this magazine titled “Sales Rock Stars Still Exist.” According to Jim, “They all became a brand within a brand, a dealership within a dealership. See, these individuals reach out to their communities and generate their own business and manage relationships and referrals.”

Sounds plausible. Sounds intriguing. Sounds promising.

Unfortunately, there are always a few bad actors who go off the rails to move a transaction forward. A new and worrisome trend proves it.

Read: Van Over: Consumers Don’t Always Tell the Truth

The Franchisee Among Us

A growing number of salespeople appear to be taking advantage of a burgeoning “franchise” opportunity to brand oneself as a “credit repair organization” to generate leads through social media.

An owner alerted me to this phenomenon with a frantic phone call. He said CROs are fraught with potential compliance concerns an owner, general manager, and compliance officer should be concerned about.

Franchisees are instructed to establish a separate LLC to create the CRO — while still actively employed at the dealership — then use social media to seek out consumers with challenged credit with the proposition of repairing it, then try to sell them a car.

Sounds plausible. Sounds intriguing. Sounds risky.

Some salespeople believe the fake news that a customer’s data belongs to the salesperson when we know the truth is that the data belongs to the dealership.

My first concern has to do with perception and inference. Is the salesperson linking his CRO to the dealership by name in the social media posts? That could imply or infer that the CRO process is a service provided by the dealer. The Credit Repair Organization Act has an entirely separate set of compliance requirements apart from the usual requirements that most dealers address in their compliance management system.

The next area of concern is the handling of the consumer’s nonpublic personal information. Some salespeople believe the fake news that a customer’s data belongs to the salesperson when we know the truth is that the data belongs to the dealership. How is the NPI received and transmitted? How is it safeguarded? How is it shared? Who is it shared with? Is it shared in accordance with privacy notice opt-out declarations?

Some CROs have been rumored to generate synthetic identities to help consumers with challenged credit start a new profile. Is your salesperson using this approach?

Read: Van Over: Yesterday’s Standards Are Today’s Felonies

Word Travels Fast

The dealership sales grapevine will be buzzing about this new, exciting approach to selling a car.

Will the other salespeople turn to the CRO owner with a challenging credit consumer for a bird dog fee? Once the F&I manager knows a deal is for a CRO customer, does she have an obligation to share that material information with the finance source when submitting the deal for approval?

I advise dealers to tell their salespeople that, although innovation and aggressiveness are encouraged, if they want to act as CROs, they will have to sell cars somewhere else. And if you are in an at-will employment state, you may have a right to prohibit a CRO due to the NPI concerns. Check with your local HR attorney.

Further, be sure your policies are updated, your general manager is aware of the issue, and computers and tablets are periodically checked for CRO references. Monitor social media, texts, and CRM follow up notes, and ask your vendors to be on the lookout for suspicious activity.

Good luck and good selling!

Read: Van Over: F&I Meets a New-Age Dr. Frankenstein