What's NAAG-ing You?

You didn’t know you had a lot in common with your local Attorney General, did you? Just think about it. You’re both very driven and ambitious (we don’t call them “AGs” or “Aspiring Governors” for nothing, you know). You both care about your public image. And, neither of you is a stranger to phone calls from angry customers (OK, so that was a joke—sort of!).

But, there’s one key similarity between dealers and AGs. Like many dealers, every so often, AGs travel from far and wide to hang out with their industry brethren and compare notes—successes, failures, trials and tribulations. Dealers call these groups 20 groups. AG’s call this group the National Association of Attorneys General, or (the appropriately named) “NAAG.”

Like a 20 group, NAAG members set goals, analyze benchmarks and compare notes. AGs walk away from NAAG meetings with new ideas of bigger and better ways to bring claims and levy fines against all sorts of unsavoury critters—and car dealers.

I can’t help it, but I can’t shake this image of a stiff-looking suit, high five-ing his little pocket-protector-sporting buddy, saying, “Hey Cecil! I just busted this one store for payment packing! That’s a 150-pounder for me! What’d you do last month?”

In all seriousness, we may never know what really goes on in NAAG meetings. But, we’ve been clued in a bit. Just last month, NAAG released its Top 10 Consumer Complaints List for 2007. According to the NAAG Web site, the list of consumer complaints is a compilation of reports provided by the various AG offices nationwide.

So, what consumer complaints made the coveted NAAG list this year? Drum roll, please! The winners are …

1. Debt Collection
2. Auto Sales
3. Home Repair/Construction
4. Telecommunications/Slamming/Cramming
5. Automotive (General)
6. Telemarketing/Do-Not-Call
7. Financial/Investments
8. Retail Sales
9. Internet Goods and Services
10. Contests/Sweepstakes/Prize Promotion

According to the press release, these findings are based on a “non-scientific survey from the top complaints” from across the land, and provide a “snapshot of trends and enforcement activities” occurring in the states. The release also boasted that, “Attorneys General are a leading consumer protection force in the nation and can be found in the forefront of defending senior citizens from telephone and mail fraud and home repair fraud, protecting consumers from fraudulent practices as the practitioners migrate from the ‘bricks-and-mortar’ to the ‘online’ world.”

So, this top 10 list got me thinking.

First of all, I was shocked and amazed by how many of these top 10 items apply to the car business. I know of dealers who have been busted doing things that could easily fall into eight of the 10 categories listed above. (For those curious folks, I’ve yet to see a dealer get nailed for a home construction project, and while I’ve seen a lot of slamming and cramming in my day, the AGs seem to use this term to refer to telecommunications abuses.)

What’s also interesting is that the AG enforcement actions against dealers in 2008 have been so reflective of the abuses reported in 2007. Don’t believe me? Those of you who have been reading the news in 2008 will know that AGs nationwide have come down like a hammer on dealerships running “special” sweepstakes and price promotion ad programs this year. We’ve also read about AGs nailing dealers for everything from payment packing to failing to pay off the liens on trades.

So, what should a dealer do? It’s time to pay attention to those AG radar detectors, folks! What that means for you is that you should clean house where the AGs have indicated they are mostly likely to look.

Making sales calls? How does that Do-Not-Call Policy of yours look? Thinking about running one of those third-party marketing company “win a prize” ads? Maybe it’s time to pass, or pay your local dealer lawyer to give it a thorough scrub. Selling cars on the Internet? Have you and your lawyer reviewed your online sales procedures lately?

Maybe it’s time to pay attention to the things the AGs are paying attention to. After all, there are some “top 10” lists you just don’t want to be on!