In today's lawsuit-happy environment, dealership F&I departments are facing more and more legal challenges to their business practices. So what's an honest dealer to do?

One excellent first step is to inculcate and encourage ethical behavior in your employees through training, according to John Walsh, president of the Institute for Ethical Behavior. If your business manager and other employees in the F&I department know the correct, ethical and legal methods for dealing with the challenges and questions that come their way as they perform on the job from day to day, your dealership is in a much better position in the event of a lawsuit.

The Institute has just released a new course for the retail automotive F&I industry designed to accomplish those goals. Ethics Training for Automotive Finance Professionals is an interactive, self-administered Internet tutorial. “The course is designed not only to enhance finance department ethics but also to limit dealers’ legal exposure,” said Walsh, who authored the course.

"During this introductory period, F&I Management and Technology readers and subscribers to the F&I E-Weekly are invited to review this ethics training at no charge, to determine if they would like to incorporate the program at their dealership," Walsh said.

Ethics Training for Automotive Finance Professionals is based on more than 100 interviews with finance managers and directors, general managers, dealers, attorneys, finance providers, regulators and customers. The research also included an analysis of more than 500 lawsuits involving automobile dealers.

The objective of the year-long project, according to Walsh, was to find as many examples of unethical and illegal conduct as possible, learn how ethical dealers operate, and then develop a training program to help stop this behavior and replace it with ethical business practices.

“Over the long run, ethical behavior dramatically improves sales and increases referrals and repeat customers. We see it all the time in the investment business,” said Walsh, who has conducted ethics training for more than 15,000 commodity and stockbrokers. He has also written five books on the importance of ethics in the brokerage business.

“Our legal review showed us how many dealers are being sued these days; judgments over $100,000 are not that unusual,” Walsh told F&I. “Some lawyers are even actively soliciting this kind of business, particularly class action lawsuits."

Walsh said the Institute can’t render legal advice or assure that lawsuits won’t be filed. "However, it is our position that dealers who make the effort to have their employees take the course and obtain certification can reasonably assert those actions as a defense to a claim of negligent supervision," he said. "Dealers can also use this ethics training program to substantiate a claim that illegal acts by finance department employees were far beyond the scope of their employment and in contravention of policies established by their dealership.”

For more information or to review Ethics Training for Automotive Finance Professionals at no charge to see if it is right for your dealership, visit www.InstituteForEthicalBehavior.com.

About the Institute for Ethical Behavior

The Institute for Ethical Behavior is a subsidiary of the Walsh Agency Inc., a government-authorized ethics training provider for the futures and security industries.