Recently the Federal Communication Commission (“FCC”) enacted new rules and regulations related to the Telephone Consumer Protection Act (“TCPA”), which regulates how companies may contact consumers by telephone. TCPA prohibits companies from contacting consumers via automated dialing systems, either by text or by telephone, without prior express consent of the party called. These rules, effective October 16, 2013, significantly change what constitutes prior express consent.
TCPA now requires firms to obtain prior written consent for auto-dialed marketing or advertising calls and text messages. Acceptable written consent must include clear and conspicuous disclosures that the consumer consents to receiving auto-dialed calls or text messages, including pre-recorded messages, on behalf of a specific seller, and clear and unambiguous acknowledgement that the consumer consents to receive such calls and text messages at the number provided. The company cannot condition the sale of goods or services on the consumer consenting to receive auto-dialed marketing or advertising calls, and the caller bears the burden of demonstrating the consumer consented to the contact. An “opt-in” text reply alone may not meet the new prior written consent required by TCPA. These revisions apply retroactively, so any companies that have received consent prior to the enactment of these new rules will likely have to obtain consent from the consumer again.
Dealers have to be mindful of how these changes to TCPA affect their businesses. First, if you utilize a third-party to solicit consumers via calls or text messages, you must ensure that your vendor complies with TCPA. If not, you may find your business liable for violations of the law (see: “Lithia Faces $2.5 Million Tab For Texting”). Even if you do not use an outside vendor in the aforementioned manner, you may still have to comply with TCPA if you use a device capable of auto-dialing to contact consumers by text or by telephone. It is likely that TCPA’s restrictions encompass computers capable of auto-dialing. So, if you utilize a service such as Google Voice, Skype, or an auto-dialer through a CRM system, you will likely need to obtain prior written consent before soliciting consumers by calls or text messages.
An editor of Automotive News recently reported on a seminar held at a F&I conference where the panelist generally endorsed using video cameras to record transactions in the F&I office. There are pros and cons to recording these transactions. While recordings can be helpful tools for enforcing compliance, training staff, and rebutting accusations by consumers of wrongdoing in the F&I office, they can also be the “smoking gun” of unlawful business practices that provide plaintiffs or regulators with the evidence needed to impose costly penalties and damages.
Deciding whether to record F&I transactions takes more thought than merely selecting what equipment to use. Before you get your cameras rolling, you should consider the following:
Will You Record Every Transaction? That one transaction your staff forgets to record could be the one where problems arise. Worse, an employee who is violating the law may selectively record transactions or edit recordings in order to hide any transgressions. If you decide to record your F&I staff, you should consider mandating that every F&I transaction is recorded. If a consumer refuses to be recorded, document the refusal, and maintain adequate records to help reconcile all transactions against ones recorded.
How Does Recording F&I Transactions Fit With Your Coaching And Counseling Processes? You should train your staff on how to record the transactions, including obtaining the consumer’s informed consent. This will require developing a consistent script to use with consumers to obtain consent, and some written document signed by the consumer evidencing consent. You will need to designate who will review the videos and what remedial steps are taken when problems are discovered. Remember, supervisors should not to use the videos in a manner that demeans or humiliates their subordinates. These ‘candid camera’ moments, used at the expense of the employee, could provide ample evidence for an employment discrimination claim.
How Does Recording F&I Transactions Fit With Your Compliance Programs? Laws such as the Safeguards Rule and the Red Flags Rule impact how you record F&I transactions and store the recordings. It is likely that these recordings will capture information protected by state and federal law, such as nonpublic personal information, so you will have to take necessary steps to protect this information, and determine when breaches occur. You will need to amend the documents and records you maintain for compliance programs accordingly.