Avert the Y2K10 Compliance Apocalypse

I can’t help but to think about the last time we took a leap into a new decade. After all, who could forget Y2K? The computers of the world were all going to roll back to 1900, airplanes were going to fall from the sky and the business world was going to come to a screeching halt.

My guess is that many of you have Y2K stories a lot like mine. I was working in the dealership at the time, and because I was the only employee who could find her way to the Internet (this was the late 90s, remember!), the dealership appointed me as the “Y2K Coordinator.” I spent countless hours tracking down every microchip in the store and then searching for the appropriate Y2K “patch” to bring the machine up to code. I was bombarded with information, and there was no shortage of vendors offering to sell me the “miracle cure” to make all my millennium ails vanish.

I often think of this story when I speak with dealer clients today. Just like I was handed the uncoveted task of “figuring all this computer stuff out,” some of you have been dumped into this compliance frenzy armed with nothing more than the title of “compliance officer” and a new job description (“keep us out of trouble”). However, while the Y2K phenomenon proved to be more hype than “byte,” the apocalyptic compliance frenzy that dealers face today makes Y2K look like a cake walk.

After all, when we were running around trying to put out Y2K fires, there was no Red Flag Rule, Safeguard Rule, Privacy Rule and the list goes on. (It almost makes you wonder what you did with all that free time, doesn’t it?)

Fortunately, history is a good teacher. With that, here are some tips I learned while handling the Y2K crisis at the dealership that, I hope, will help you as you grapple with the new era of regulation.

It’s OK to Ask Questions. This would seem pretty simple, but it always surprises me how often folks are afraid to ask questions. It always frustrates me when I speak with dealers who go through great efforts to show that they “already knew that,” or that they have “got this compliance thing covered.” The regulatory framework is changing quickly, and what was true yesterday isn’t necessarily true today. If you’re not asking questions, you’re probably not getting all the information you need.

Asking questions doesn’t (always) have to cost money. Come visit Tom Hudson, other Hudson Cook attorneys or me at our booth at one of the various conferences we attend. Your national or state dealer associations, DMV, and 20 group members can all be a great place to start for information. Just make sure you have some of that advice checked out by your trusty local lawyer, first.

Watch Out for “One-Size-Fits-All” Solutions. In the Y2K days, I remember being bombarded with vendors selling products guaranteed to fix all my Y2K woes. Similar claims are made by some vendors today when it comes to compliance. But, rarely, if ever, will a “one-size-fits-all” solution work.

Why? Because not all dealerships are the same. If you spend as much time in various dealerships as I do, that quickly becomes clear. The issues that are prevalent in some dealerships don’t even exist in others. Many federal laws understand that, and, as a result, they require dealerships to go through certain steps to make sure a fix is developed that is appropriate for the specific dealership. Many federal laws require dealerships to go through a self assessment of sorts to determine where the areas of vulnerability lie. So, any compliance solution should be cognizant of this fact.

Get Help. Before you lock your door and vow to never take help from a vendor again, remember that there are many vendors and programs available to assist you in meeting your compliance burden. We’ve worked with many clients in helping to develop these programs, and we believe that many of them are quite good. After all, if you can automate some of your compliance burden, you can free up your time to sell more cars, and that’s a good thing, right?

One Step at a Time. This whole process can seem pretty daunting at times, and it can seem like you’re always aiming at a moving target. Be persistent. You’ll get there. Compliance takes a long-term commitment and cannot be accomplished in a day, week, month, year or even a decade! So, hang in there, and you’ll get it!

So, there you have it! See ya in Y2K10!