Salespeople are Compliance Weakest Links

I became more acquainted with a casual acquaintance at a recent gathering. He was telling me about his past employment history. “I worked in this industry, then I worked in that industry,” he said before continuing, “I sold cars.” My curiosity meter naturally started ticking like an overly wound clock. I suggested it must be a tough business. His rebuttal: “Nah. It was easy. I love talking to people and I’m honest. I told my customers not to buy that warranty and not to trust the F&I manager.”

Rather than try to educate this guy who is no longer selling cars, I wondered why the dealership he worked at didn’t educate him.

Rather than try to educate this guy who is no longer selling cars, I wondered why the dealership he worked at didn’t educate him. If it had, he would have called it a service contract instead of warranty. He would have also known that the F&I manager not only supports his efforts to take care of the customer, but also to protect his gross and get his deals approved.

Go Ahead, Commit Bank Fraud

In another unrelated instance, an associate recently encountered some unusual advice while leasing a vehicle. When the associate started completing the credit application, the salesperson recommended splitting the mortgage payment because the non-signing spouse certainly paid half of the mortgage — an unsolicited attempt at bank fraud.

This made me wonder how the salesperson came upon that information. It certainly sounds like this salesperson was trained, but they were given bad information.

Sales Functions Compliance Components

We conduct more than a thousand compliance reviews every year, each of which are scored, and sales functions account for nearly two-thirds of the point deductions from them. This shouldn’t be surprising as two-thirds of the steps on a typical road to the sale (paper or digital) are sales functions.

Some of the sales functions particularly assigned to a salesperson include safeguards, identity confirmation, credit application processes, and payment quoting. With the heavy emphasis on compliance issues germinating with the salespeople, it makes sense to ensure they’ve been trained with the basics of compliance.

Here are some of the basics:

• Safeguards: This one is rather simple, and it works like the golden rule. Teach salespeople to safeguard a customer’s non-public, personal information as they would like theirs safeguarded.
• Identity Confirmation: The salesperson is usually the first dealership employee to see the customer’s government-issued identification. Train the salesperson to vet the ID like a bouncer at a nightclub or the TSA agent at the airport. Look at the photo on the ID, look at the customer, then back at the photo. If the photo doesn’t look like the customer, get a manager involved.
• Credit Application Processes: At some dealerships, the salesperson either takes the credit application or assists the customer in completing a credit application. Whatever the process is in your dealership, the salesperson must understand that it is a federal crime to commit bank fraud, and manipulating or assisting the customer to manipulate one of the five key credit determinants is considered bank fraud.
• Quoting Payments: Once the salesperson gathers some customer information and obtains a first pencil from the sales desk, he or she is responsible for delivering the dealership’s initial offer. When the customer counter offers, the salesperson returns to the desk for further guidance. Some potentially deceptive practices can crop up during this back and forth such as payment packing or kicking the trade. 

These are some simple tips you can structure sales training meetings around or include in your “road to the sale” training. Giving the salespeople a little bit of compliance knowledge can help prevent compliance headaches down the road.

Stay safe, good luck and, good selling!

Gil Van Over is the executive director of Automotive Compliance Education (ACE). He is also the founder and president of gvo3 & Associates.