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Oklahoma Independent Automobile Dealers Association

DEALERS’ RESOURCE January 2011

Resolutions for

Success

In This Issue The Forms Factor – A Critical Issue for Dealers Page 10

Does the FTC Privacy Rule Apply to My Dealership? Page 16 Improperly Assigned or Reassigned Titles Page 30 Change Service Requested DALLAS, TEXAS Permit No. 2079

PAID

PRSRT Standard U.S. Postage

OIADA, P.O. Box 6905, Moore, OK 73153

Visit Us Online At www.e-oiada.com OK_0111.indd 1

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INSIDE

MAGAZINECONTENTS 6 Resolve to Give Back 10 The Forms Factor – A Critical Issue for Dealers 16 Does the FTC Privacy Rule Apply to My Dealership? 30 Improperly Assigned or Reassigned Titles

ADVERTISERSINDEX 71B Auto Auction..........................................13 ADESA.........................................................17 Albright Insurance.......................................... 7 AutoTrader.com.............................................. 5 Dealers Auto Auction of OKC ......... Back Cover Jordan Insurance Group................................. 9 Loftis Wetzel Insurance .................................19 Manheim.com........................Inside Back Cover Manheim North Texas............Inside Front Cover SmartAuction.................................................11 United Acceptance......................................... 8 Western General / Protective ........................15

Board of Directors PRESIDENT Chris Goad Regal Motors 3515 N. May Oklahoma City, OK 73112 405-917-5800 managerokc@regalcars.com CHAIRMAN OF THE BOARD John Easttom Auto Mart of Elk City P.O. Box 981 Elk City, OK 73648 580-225-1100 automart@cableone.net SECRETARY/TREASURER Bruce Beam Dealers Auto Auction of OKC 1028 S. Portland Oklahoma City, OK 73147 405-947-2886 www.daaokc.com

VICE PRESIDENTS John T. Longacre, IV Taft Motors, Inc. 722 S. Linden St. Sapulpa, OK 918-224-7700 taftmotorsinc@msn.com Julian Codding Reliable Motors, Inc. 9201 S. Shields Oklahoma City, OK 405-912-5000 juliancodding@msn.com

Glenn McDaniel I-35 Credit Auto 1113 SE 51st St. Oklahoma City, OK 73129 405-670-4100 gtamcd@aol.com David McQuerry McQuerry Motors, Inc. 1302 N. Harrison St. Shawnee, OK 74801 405-273-8171 mcquerrymotors@yahoo.com

Monte Shockley Shockley Auto Sales 2605 N. Broadway Poteau, OK 74953 918-647-3999 sas@clnk.net

OIADAOFFICE 813 NORTHWEST 34TH MOORE, OK 73160

EMAIL: odell.morgan@sbcglobal.net ROSE & ODELL MORGAN, Executive Directors

AMBER SNOOK, Administrative Assistant

JACKIE GARNER, Office Manager

JARED MORGAN, Electronics/ Software Technician

LYNNA KAY, Programmer STEVE MORGAN, Consultant MIKE MORGAN, Technical Aide

FOR INFORMATION ON HOW TO BECOME A MEMBER OF OIADA PLEASE CONTACT ROSE OR ODELL MORGAN AT 405-232-2947.

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION WWW.NIADA.COM • WWW.NIADA.TV NIADA HEADQUARTERS: 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838 FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR TROY@NIADA.COM.

DEALERS’ RESOURCE IS A PUBLICATION OF AUTOMOTIVE DEALERS RESOURCE OF OKLAHOMA (ADR) PRODUCED ON BEHALF OF THE OKLAHOMA INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION (OIADA), P.O. BOX 6905, MOORE, OK 73153. THE DEALERS’ RESOURCE IS PUBLISHED MONTHLY BY THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION SERVICES CORPORATION. PERIODICAL POSTAGE PAID AT ARLINGTON, TX, AND AT ADDITIONAL OFFICES. POSTMASTER: SEND ADDRESS CHANGES TO OIADA, P.O. BOX 6905, MOORE, OK 73153. THE STATEMENTS AND OPINIONS EXPRESSED HEREIN ARE THOSE OF THE INDIVIDUAL AUTHORS AND DO NOT NECESSARILY REPRESENT THE VIEWS OF ADR OF OKLAHOMA, THE OKLAHOMA INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION OR THE NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION. LIKEWISE, THE APPEARANCE OF ADVERTISERS, OR THEIR IDENTIFICATION AS MEMBERS OF OIADA OR NIADA DOES NOT CONSTITUTE AN ENDORSEMENT OF THE PRODUCTS OR SERVICES FEATURED. COPYRIGHT © 2010 BY O&R MORGAN, INC. DBA OIADA. ALL RIGHTS RESERVED. DEALERS’ RESOURCE IS A PUBLICATION OF AUTOMOTIVE DEALERS RESOURCE OF OKLAHOMA ON BEHALF OF THE OKLAHOMA INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION (OIADA), BUT IS MAILED TO ALL DEALERS IN THE STATE IN AN EFFORT TO EDUCATE AND ENCOURAGE NON-MEMBERS TO JOIN THE ASSOCIATION AND SUPPORT OUR EFFORTS TO IMPROVE THE IMAGE AND PROFIT POTENTIAL OF THE INDUSTRY. FOR 55 YEARS, WE HAVE WORKED TO REPRESENT THE INDEPENDENT MOTOR VEHICLE DEALER IN OKLAHOMA. WE NEED YOUR SUPPORT. FRONT COVER BY Mike Morgan STATE MAGAZINE MGR./SALES Troy Graff • troy@niada.com EDITOR Mike Harbour • mharbour@niada.com PRODUCTION MGR. Jacob Kerns • jacob@niada.com ART/PRODUCTION MGR. Christy Haynes • christy@niada.com PRINTING Nieman Printing

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RESOLVE TO HAVE A r New Yea

Happy

O I A DA B OA R D & S TA F F

The OIADA Board and Staff take this opportunity to wish all of you a Very Happy and Prosperous New Year. It’s already better

because the campaigning is over! That always helps. Perhaps we will soon have a little more certainty of what to expect during the next two years regarding taxes and regulations. That will help with planning. We believe there is now a potential for easing the requirements certain to be coming from the new Consumer Protection Financial Bureau (CPFB) created by the last Congress and enacted into law by President Obama. Keith Whann, NIADA’s legal counsel, and Federal Advocates, NIADA’s Washington lobbying firm, have recently been working with the regulators regarding the impact this law could have on dealerships. We are hopeful good news will come

from those meetings. And, we believe Congress will rescind the Health Bill’s onerous requirement to send 1099s to every entity from which we purchase $600 or more of goods and services. There appears to be a better than even chance the Bush tax cuts for all taxpayers will be extended, at least temporarily. That’s all good news! Other areas of legislation and proposed regulations being considered in the last Congress and by regulators are now subject to review by the new Congress. We look forward to getting some better news from those areas. That alone will make this a Happy and more Prosperous New Year for dealers! We look forward to helping you achieve those objectives.

PERHAPS WE WILL SOON HAVE A LITTLE MORE CERTAINTY OF WHAT TO EXPECT DURING THE NEXT TWO YEARS REGARDING TAXES AND REGULATIONS.

A James’ Venture Eddie and Sharon James, Jr., great friends and longtime OIADA members. They own and operate Green Country Auto Sales

in Collinsville in Northeast Oklahoma. In early November last year, Eddie and Sharon took a trip to Panama City, Fla., to participate in the grueling Ironman Triathlon. That exercise consisted of a 2.4-mile swim in the Gulf of Mexico, followed by a 112-mile bike ride and ended with a 26.2-mile marathon. These two durable athletes completed the triathlon in what most of us would consider fantastic times for such a feat. Sharon’s time for whole event was 14 hours and 42 minutes, while Eddie finished in 13 hours and 34 minutes. And believe it or not, they are already planning their next race. At least, Sharon is, because she is really pumped. Eddie spent their planning time eating ice cream and resting.

NIADA’s EAGLE AWARD EARNED DAA’s Bruce Beam accepts the NIADA Membership Eagle Award from OIADA President John Easttom and Chairman David Rath on behalf of Gary Smith and Dealer’s Auto Action of OKC. This award for 2010 was earned

when DAA of OKC went above and beyond in membership recruitment and maintenance through their promotional effort having recruited 37 new members in addition to assisting in maintaining many current memberships.

WE CONGRATULATE GARY AND BRUCE AND EXPRESS OIADA’S APPRECIATION FOR THEIR OUTSTANDING RECRUITMENT EFFORTS.

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Resolve To Give Back

BY MIKE MORGAN, ADR STAFF

With the holiday season behind us, the farthest thing from the mind of most business owners is giving back. We feel like we’ve given and we’ve

given and we’ve given, and people have taken and taken and taken. So the thought of giving any more seems crazy. I’d like to propose, however, that as business owners we should be thinking about giving back every day. I want to make it clear that giving back doesn’t necessarily mean giving money to every boy and girl who are trying to sell tickets to the local school pancake breakfast. Let’s be honest: that doesn’t help business much, does it? The problem with most company policies on giving back is it’s easier to just write a check than to do anything more involved. But when you write a check, where is the return? I know, I know. When you write a check to the local little league team, your name

appears on the back of their jerseys and then quickly gets covered in mud as little Jimmy slides in for his homerun. Or, what about when you give to the local school basketball calendar and your logo is printed one-inch-by-one-inch on the bottom righthand corner and promptly has a thumbtack put through it? Writing a check is all too often thought of as “giving back.” But the same people who write the checks get mad when there’s no return. So step back, look at the situation, and change how you give back. Toy stores often run promotions like bringing in a new unwrapped toy for a needy child to receive 10 percent off for a new toy yourself. Restaurants might run a canned food item promotion where you bring in something for the food bank so you can receive a free dessert. What’s the difference between these methods and writing checks? The difference is getting

people into your store. As car dealers, it’s hard to sell cars when nobody’s there to buy them. So why not give back to the community and get people to buy your cars at the same time? With the holidays over, people have stopped thinking about others in need. Why not run a promotion at the beginning of February? Invite your future customers to bring in a new coat, and give them a hundred-dollar coupon toward the price of a car. Or maybe offer them a free oil change and follow up with a free car inspection. Giving back should not break the bank. Instead, it should help your business grow. If you’re looking for more ideas, feel free to contact me at mike.morgan@buyadr.com or 888-292-8080.

AS CAR DEALERS, IT’S HARD TO SELL CARS WHEN NOBODY’S THERE TO BUY THEM. SO WHY NOT GIVE BACK TO THE COMMUNITY AND GET PEOPLE TO BUY YOUR CARS AT THE SAME TIME?

Resolve To Reach Out

BY MIKE MORGAN, ADR STAFF

In the good old days, advertising was as simple as putting an ad on the television. Sadly, times have changed. People have stopped watching

TV and now spend all of their time on Facebook. However, many car dealers have not changed their marketing approach. Social media has redefined the way businesses advertise. It is now less about expensive commercials and more about real-life conversations. Southwest Airlines has been called innovative, different, and (my personal favorite) rebellious. It looked at all the traditional values of the aviation industry and decided to take a different approach. It also took the same approach with its marketing, too. Southwest Airlines understands people. It has embraced the LUV (its NYSE ticker symbol) mindset. Its constant goal is to reach out to its customers – past, present, and future – and engage them. Southwest spends a lot of time on Facebook (facebook.com/southwest), Twitter (@SouthwestAir), YouTube, and Nuts About Southwest, the airline’s blog

(www.blogsouthwest.com). The goal is not to bombard consumers with cheap advertising tricks to convince them to fly Southwest. On the contrary, it’s all an effort to simply open the lines of communication. First, Southwest wants to know who you like to fly with. Personally, I fly United Airlines, and I have had multiple conversations with Southwest Airlines on Twitter about why I fly United. By understanding the reasons customers do or do not fly with them, Southwest has actual data that can be used when decisions need to be made about changes. Secondly, the airline is constantly listening for problems and takes a proactive approach regarding customer issues. My friend Carl was on flight from New Orleans to Las Vegas, where he would transfer to another flight. His first flight was delayed due to weather. Upon arriving in Las Vegas, he still had plenty of time to get to his next flight. Carl received an e-mail from Southwest Airlines. The message shocked him but was plain and simple: “We’re sorry for your delay. Here is a two hundred-dollar travel voucher.”

As a frequent flier, I would love to see any airline take this approach, but the part that’s truly amazing about this story is his flight was only delayed fifteen minutes and arrived almost on time. This proactive approach can seem ridiculous to the business owner but can make the customer overwhelmingly grateful. One of the best ways to ensure new business is to retain repeat business. Finally, Southwest lets customers know what’s going on. Information as simple as flight delays or as complex as questions about its merger with AirTran, Southwest Airlines is online and ready to help. Social media doesn’t follow traditional marketing schemes, however, it is rapidly becoming the best way to reach your customers. If you don’t believe me, I challenge you to not get involved online and prove me wrong. If you do believe me, I’m here to help. ADR is glad to offer solutions to your online brand-management needs. Contact me at mike.morgan@buyadr.com or 888-292-8080.

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INTRODUCING CAMPBELL HIRST ADR Staff

Many of you have already met Campbell Hirst, as he’s been involved in the business of buying and selling motor vehicles in Oklahoma, Texas and Arkansas for almost 30 years. But now we want to introduce you to Campbell Hirst, outside sales rep for DAA of OKC. Campbell and his wife, Janet Hirst, have four children: Amanda, Pamela, Sarah and Jacob. They also are the proud grandparents of Connor, Tyler, Cody and very recently, Anika. If you have already met Campbell, I’m sure you’ve noticed his charming British-like accent. Campbell was born in New Zealand, but was lured to permanent residence in the good old US of A after he met Janet. Her home was in Spiro, Okla., and that’s where they settled for some 20 years where they operated Stout and Stout Auto Sales. During that time, Campbell earned his U.S. citizenship, served as a member of the OIADA board of directors and was selected as the state’s Quality Dealer in 1998. Manheim’s Dallas-Fort Worth Auto Auction lured Campbell to Dallas where he faithfully served for eight years, then moved on to Sterling Bank as its dealer division manager. Just recently, Gary Smith of Dealers Auto Auction of OKC captured Campbell and now has him meeting and greeting dealers all over the region as DAA’s outside sales rep. We take this opportunity to congratulate DAA of OKC for having enlisted Campbell and congratulate Campbell for accepting this opportunity to once again become an “Okie” with a British accent. One thing Campbell would welcome is for dealers to have his cell phone number, open to dealers 24-7: it’s 918-208-2128. Welcome home, Campbell!

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PROCR PROCR PROCR PROCR PROCR PROCR PROCR

DON’T DON’T DON’T DON’T DON’T DON’T DON’T

PROCRASTINATE PROCRASTINATE PROCRASTINATE PROCRASTINATE PROCRASTINATE PROCRASTINATE PROCRASTINATE

DON’T DON’T DON’T DON’T DON’T DON’T DON’T

DON’T PROCRASTINATE FURTHER

IT’S TIME FOR ACTION

This Is NOT a Happy New Year Message, But It Could Be If you haven’t already done so, it’s time to take advantage of the Model Privacy Notice Forms which, when used properly, provide dealers a so-called safe harbor from Federal Trade Commission (FTC) enforcement of the new Privacy Rules. As you may know, the privacy notices you’ve been

using are now obsolete and non-compliant. The new privacy notice safe harbor forms are intended to make it simple and easy for consumers to understand what personal nonpublic information you collect from them, what you use it for, and how you protect that information. Unfortunately, the information a dealer is required to provide to achieve a safe harbor is not that simple or easy for the dealer to configure. The reason is there are 261 pages of rules that need to be understood and some 280 variations of information required to be put into the forms to correctly represent your dealership. For instance, each dealer’s notice must be configured to that dealership’s operation. One dealership’s notice will be different from all other dealerships’ notices. Therefore, for ADR to configure and produce a privacy notice to conform to your dealership, we will need you to provide us with specific information regarding your collection, use, protection and disposal of the consumers’ personal, nonpublic information.

If you will provide us with your e-mail address, this process will be much quicker, easier and more efficient because it will allow you to fill out, on line, the five-page privacy worksheet and review the completed form information we submit to you once we have the worksheet information. The prompt exchange of information through the use of e-mail and completion of the worksheet online will expedite the ultimate printing and delivery of your personalized Privacy Notices. For those of you who, for whatever reason, don’t want to fill in the worksheet using the web version, ADR staff will be happy to mail or e-mail a copy of the paper or digital version for your use. We also will make staff available by appointment to take your information over the phone (405-799-7116) to fill out a worksheet or to assist you in filling out the worksheet. To access the online worksheet, go to www.buyadr.com, click on OK (for your state), and click Go. On the next page, there is a Privacy message in red on the left side of the page; click that message and then follow the instructions. If you have problems or need help, call us at the above referenced number or send an e-mail to odell.morgan@sbcglobal.net. We will help you in whatever way is most convenient for you. The deadline was January 1! The ADR team is prepared to personalize your privacy

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THE ADR TEAM IS PREPARED TO PERSONALIZE YOUR PRIVACY NOTICES, USING THE INFORMATION THAT YOU PROVIDE ON THE WORKSHEET.

By ADR Staff

notices, using the information that you provide on the worksheet. The model form must be printed on white or light color paper (such as cream) using black ink. Logos are not recommended, but may be added and printed in color if you desire. Very little room is available on the model forms for a logo and if you want it in color, there is an additional charge. There also is a one-time set-up fee of $50 to configure the form for printing using the information that the dealership provides. Most dealerships will only need a single sheet printed front and back. Unfortunately, the forms cannot be produced in bulk to save on cost because of the need to personalize each dealer’s privacy disclosures. We have negotiated what we believe are the best print prices we can get. The forms cost will vary, depending upon the number of pages your dealership requires and the volume of forms that you order. Following is the print price schedule:

ALL PAGES 8 ½” X 11”

PRICE PER 100

PRICE PER 300

PRICE PER 500

One side, black ink

$20

$40

$50

Duplex (1 page printed both sides) $30

$60

$70 *The one most dealers will need.

Duplex (1 page W/color - logo)

$120

$145

$50

We are here to serve you. ADR - Our Mission: Your Success

This article is intended for information only – it has no legal application. For its application to your dealership, you are requested to contact your legal advisor.

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The Forms Factor – A CRITICAL ISSUE FOR DEALERS By ADR Staff To provide maximum protection for dealers and their customers, ADR (your OIADA forms supplier) goes to considerable effort and expense to provide forms that comply with federal and state laws, rules and regulations. The use of non-compliant

forms, forms that don’t work together and the misuse of forms are among the first things consumer attorneys look for as a way to break a car deal or to sue a dealer. In these tough economic times, it is more important than ever for dealers do all they can to protect themselves and their dealerships against federal and state enforcement officers and consumer attorneys. Oklahoma has a set of forms requirements and the feds have a set of forms requirements. Some of these requirements overlap and some don’t. To help keep you in compliance with both the state and federal requirements at the least expense to you, we have, in some instances, combined one or more of these forms into a single form. A good example is the ADR Retail Purchase Agreement which includes the requirements of a Bill of Sale; Dealer Warranty Disclaimer; Deposit and Downpayment Receipt; Vehicle Buyer’s Order; Trade-in Record and Customer Acknowledgements. When the ADR Retail Purchase Agreement is used in a sale, those other forms listed above are not necessary. For your information, we are listing below the forms which we suggest a dealership use to meet both the state and federal requirements. Following the listing of forms, we are providing an explanation of the contents of each form and the federal and/or state requirements each form is intended to satisfy. Forms required for used vehicle retail sales

not financed by or through the dealer: 1.  Federal Trade Commission’s Buyer’s Guide (FTC sticker – AS IS form). (Required by both state and federal.) 2.  Retail Purchase Agreement/Bill of Sale (Required by both state and federal.) 3.   Odometer Disclosure Statement (This Statement is on the assignment portion of Oklahoma titles, but is also available as a separate document.) (Required by both state and federal.) 4.  Title Receipt (Written notice of thirty day title transfer requirement and receipt for delivery of certificate of title to buyer.) (Required by state.) 5. Condition of Sale: (Required by both state a nd federal.) (A) Used Vehicle Limited Warranty; or (B) Dealer Warranty Disclaimer (C) Vehicle Service Contract 6.  “We Owe” form (Delivery Confirmation) (Required by state.) 7.  Used Vehicle Dealer’s 30 Day Temporary License Tag (Required by state.) 8.   Consignment form, if vehicle is consigned to dealer for sale by another entity. (Required by state.) 9.  Deposit or Down Payment Receipt (Required by federal.) 10. Privacy Notice (Required by federal.) 11.   Federal Trade Commission’s Spanish Buyer’s Guide (FTC sticker – AS IS form) (If sale is made in Spanish Language) (Required by federal.) 12. Any other form which affects the rights of either party. (This is a specific state requirement that also applies to federal rules.) 13.  Transferable Certificate of Title

(Required by state.) Additional forms required for used vehicle retail sales that are financed by or through the dealer: 1.   Finance or Security Agreement (State specific) (Required by both state and federal.) 2.  “Spot Delivery” form – Motor Vehicle Delivery Agreement (Required by state if vehicle is delivered, but final sale is subject to obtaining financing.) 3.  Authorization to Release Payoff Information (Required by federal.) 4.  Notice to Co-signer (Required by federal, if co-signer is involved.) 5.   Credit Insurance Disclosure (Required by state and federal.) Forms required in dealer to dealer sale: 1.  Bill of Sale (Required by state.) 2.   Odometer Disclosure Statement, if Certificate of Title is present, the reassignment portion contains this information (Required by state.) 3.  Wholesale Purchase Agreement (Required by federal.) 4.  Transferable Certificate of Title (Required by state.) Forms that are not necessarily required by either state or federal, but are designed to protect the dealership’s assets resulting from misunderstandings that may occur in a car deal. These forms have been developed as a result of court rulings in lawsuits against dealers. They are developed as the need arises. We list a few here: 1.  Trade-in Vehicle Appraisal (Dealer’s protection.) 2.  Customer Proposal Work Sheet (Dealer’s protection.) continued on PAGE 12

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The Forms Factor –

THESE LAWS OFTEN REQUIRE THAT SPECIFIC TERMS AND DISCLOSURES BE SET FORTH IN THE RETAIL PURCHASE AGREEMENT AND SPECIFY THE FEES THAT MAY BE CHARGED IN CONNECTION WITH THE SALE.

3.  Test Drive Agreement (Dealer’s protection.) 4.  Acknowledgement of AS-IS Sale (Dealers protection.) 5.  “Good Will” Repair Agreement (Dealer’s protection.) 6.  Interpreter’s Acknowledgement (Dealer’s protection in sales conducted in English to foreign language consumer.) All forms must be approved by the Used Motor Vehicle and Parts Commission. Contents of the Listed Forms and the Requirements That Each Form is Intended to Satisfy: Form F 04, (A 207) FTC Buyers Guide (“AS IS Window Sticker”)(Required by state and federal); Official warranty disclosure document required to be posted on all used motor vehicles that are offered for sale. The Document itself must conform to federal specifications related to size and print. Form is used to disclose whether the dealer offers any warranty on the vehicle, and if so, a brief description of the components covered and the time frame of coverage. If a warranty is offered, the dealer must provide a separate warranty document describing the specifics of the warranty (see Form A 116, Used Vehicle Limited Warranty). Form F 06, (A 130) Retail Purchase Agreement (Required by state and federal); The Retail Purchase Agreement is the key form in a motor vehicle sales transaction and is impacted by a number of federal and state laws. These laws often require that specific terms and disclosures be set forth in the Retail Purchase Agreement and specify the fees that may be charged in connection with the sale. For example, anyone who offers a written warranty is prohibited from disclaiming or modifying implied warranties, with some exceptions. However, specific language must be used for “As Is” sales or limited warranties so as to leave no doubt that the consumer made a voluntary informed decision to purchase the vehicle. State vehicle codes and Unfair and Deceptive Acts and Practices (UDAP) statutes also provide that it is an unfair and deceptive act or practice to fail to integrate all material statements, whether oral or written, into a written sales contract prior to obtaining the customer’s signature on the contract. While a “Bill of Sale” may meet the requirements of the law for a wholesale sale, it does not meet the requirements of the law for retail sales, however a “Retail Purchase Agreement” also includes all the information that is required for a Bill of Sale so it serves as a Retail Purchase Agreement AND a Bill of Sale. Form F 02, Odometer Disclosure Statement (Required by state and federal); State and Federal law require that the vehicle mileage be noted upon transfer of ownership. Failure to complete or providing

a false statement may result in fines and/or imprisonment. This form requires specific language as determined by the Federal Trade Commission (FTC) and requires the signature and printed name of both the transferor and the transferee. Oklahoma Titles contain an odometer disclosure statement form on the assignment portion of the title and must be competed at the time of sale. Separate copies of the form are available for those who desire them. Form F 03, Title Receipt (30 day notice); This form is designed to satisfy the State’s requirement for the dealer to advise the customer that he has 30 days to register the vehicle. It also provides the dealer with proof that the title has been delivered when the receipt is signed by the customer. If the title (together with the 30 Day Notice) is mailed to the customer by certified mail, return receipt requested, when that return receipt or the unopened letter is returned, that serves as the receipt for title delivery. If the letter is returned, leave it unopened and place it with the file for that vehicle. Condition of Sale (State and federal require one or more of the three options listed below be used): (A) Form A 116 – Used Vehicle Limited Warranty – discloses the required warranty information and must be used in conjunction with the FTC Buyer’s Guide when the “Warranty” box is checked. If no warranty is offered, then the “AS IS NO WARRANTY box must be checked and a (B) Form F 01 – Dealer Warranty Disclaimer must be provided. (C) Vehicle Service Contract – If a Service Contract is offered, it must be noted on the FTC Buyer’s Guide and must contain the coverage, deductible, price and exclusions information. Form F 10.3 (A 123) “We Owe” form (Delivery Confirmation) – (State required.) This form is used to provide a written record of any items still owed to the customer and substantiates that noting else was promised. Used Vehicle Dealer’s 30 Day Temporary License Tag – (State required.) The temporary license tag must meet state specifications and is to be placed at the site provided for the regular tag on each vehicle sold by a licensed used car dealer at the time of sale. These temporary license tags are available the same day they are ordered from ADR of Oklahoma. Form F 14.6 Consignment Form (Exclusive Listing Agreement) – Required by state when a dealer accepts a vehicle to sell for some other entity. This form identifies the vehicle and establishes the terms of agreement related to the consignment sale. It provides for listing data regarding the vehicle owner and identifies any lienholder and the amount, if any, owed on vehicle. It also provides for a continued on PAGE 14

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The Forms Factor –

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complete description of the vehicle, including accessories and identification of any damage. Form A 214 Deposit and Downpayment Receipt – (Required by federal.) Enables the dealership to accept a deposit and provide a dated receipt containing the following information: Vehicle description (year, make, model and VIN); cash selling price; allowance for any trade-in vehicle; time period the option to purchase is binding; and whether the deposit is refundable and under what conditions. Form F 05.1 (A 205) Initial Privacy Notice – (Required by federal.) Enables dealership to; comply with the Gramm-LeachBliley Privacy Act Requirements; to disclose business practices regarding the collection, use, sharing and protection of a customers’ private, non public information. Makes provision for customer to authorize sharing of such information or to opt out of such sharing. Form F 04B Federal Trade Commission’s Spanish Buyer’s Guide (FTC Sticker – AS IS form) – (Required by federal.) Same as Form F 04 except is translated to Spanish to be posted on vehicle when sale is conducted in Spanish language. Form F 08 Retail Installment Contract (4 part) F 08.3 Retail Installment Contract (5 part) – (Required by state and federal when financing a vehicle) Both these forms are approved by the Oklahoma Department of Consumer Credit and meet all the current requirements of Federal Regulation “Z” as of November 2010. Form F 13.1 “Spot Delivery” form (Motor Vehicle Delivery Agreement) – (Required by state.) This form is a contract describing the responsibilities and liabilities of both the dealer and the customer related to the trade-in vehicle as well as the vehicle that is the subject of a sale as well as any other assets involved, when the vehicle for sale is delivered for the customer’s use while awaiting financing approval.

Form A 119 Authorization to Release Payoff Information – (Required by federal.) With the creation of very strict federal privacy laws, many dealers find it difficult to obtain “payoff” information from customers with existing liens on trade-in vehicles. This form collects the necessary authorization for banks and lending institutions to release payoff information to the dealership. Form A 120 Notice to Co-Signer – (Required by federal if co-signer is involved.) This form is designed to comply with disclosure requirements under the Federal Trade Commission’s (FTC) “Notice to Cosigner” Rule. With many customers being “nonbankable”, subprime or lacking a credit history, dealers often find the need to have cosigners or guarantors in order to obtain financing or to finance a vehicle. This notice complies with the FTC Rule by clearly explaining the cosigner’s liability and obligations. Form A 121 Credit Insurance Disclosure – (Required by state and federal.) For customers financed through traditional financing or by a buy here, pay here dealer, there is a requirement that the customer protect the collateral through collision and comprehensive insurance coverage as well as maintain state mandated liability insurance. This document informs the customer of their obligation and potential results should they fail to maintain such coverage. The form also clearly spells out that a failure to maintain insurance is considered a breach of contract and places the debtor in default under the retail installment agreement allowing the lienholder to pursue all legal remedies. Form A 101 Trade-in Vehicle Appraisal – (Dealer protection); Since many trade-in vehicles become a part of the dealership’s inventory, this form provides the dealership with necessary information about the vehicle and its history. This form does far more than establish the value a dealer is willing to place on a vehicle offered as a trade-in. While it does assist in establishing the trade-in value, it also provides information on lienholder(s), state where the title is issued, odometer readings, prior damage, condition of airbags, etc. This form is designed to link with and verify other representations by the owner that could be of very significant importance to the dealer in future transactions involving the trade-in vehicle. Most importantly, this form provides a starting point in the dealership for establishing a bona fide error defense. Form A 100 Customer Proposal (Dealer Protection); This form allows the dealer to document the initial contact with a potential purchaser, determine what the customer is seeking in terms of a vehicle, give the salesperson an opportunity to fit a vehicle

to the customer’s needs, gather information related to any trade-in vehicle, and make clear that the proposal is not an agreement to sell. All of this is important information that will need to be transferred to the sales contract, but should never be signed by the customer because it then becomes a contract of sale and it does not contain all the factors required in a contract of sale. Form A 102 Test Drive Agreement (Dealer and customer protection); This form requires the test drive customer to document the existence of a valid driver license and liability insurance as appropriate. Identifies who will be driving the test drive vehicle, establishes conditions under which the vehicle may be operated and the precise time that the vehicle must be returned. This form could prove critical to the dealer in the event of an accident, a felony performed using the vehicle, a traffic violation committed during the test drive, etc. Could also serve to ensure the dealership’s continuing ability to maintain liability insurance. In the event the driver is stopped by law enforcement, this document confirms that the driver has authority to be driving the vehicle. Form A 126 Good Will Repair Acknowledgement (Dealer protection); Without completion of this or a similar form, the dealership, in the delivery of “goodwill” repairs, becomes obligated from now on to all kinds of repairs to the vehicle at no charge. By executing this form the consumer acknowledges that the dealership in making those “goodwill” repairs does not obligate the dealership to perform any other repairs nor to any warranties of any kind. It also incorporates this document by reference into the Repair Order for this service transaction. Form F 11 Deal Jacket (Dealer convenience); The Deal Jacket is used to store all the forms that the dealership uses to complete a motor vehicle sales transaction from beginning to end. It provides for easy storage of the documents and assists dealership personnel in ensuring the documents and sales transactions are complete and maintained in an orderly fashion. It provides a quick and convenient overview of information about your customer and the vehicle being purchased, and includes a checklist for all of the forms that are used to complete the transaction. -------------------------------------------------------

ADR is the forms supplier for OIADA and maintains an inventory of all the forms listed above, plus a few more. For more information about these forms or to place an order, call ADR/OIADA at 405-232-2947, 800346-4232, or FAX 405-799-3367, or visit our web site at www.buyadr.com.

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COMPLY

RESOLVE TO COMPLY Does the FTC Privacy Rule Apply to My Dealership? We often get this question, and our answer is, “Yes, if you are a motor vehicle dealer selling to customers for personal, family or household use, it does. If you

are selling only to businesses you are exempt from the requirement to provide privacy notices. We are not attorneys, and do not offer legal advice; therefore we encourage you to contact your local attorney for the application of these laws and rules to your operation.” We base our comments on two specific laws and the implementation rules for those laws. In this article, we are providing that information so you may decide for yourself whether your dealership needs to comply with the new privacy rules developed by the Federal Trade Commission (FTC) to implement the Gramm-LeachBliley Act (GLBA) and the USA Patriot Act, and whether you want to make use of the ADR solution to the dealer Privacy Notice issue. For a dealer to comply with the federal USA Patriot Act in any retail motor vehicle sale or lease, be it cash or credit, there must be enough information collected to verify the identity of the customer. That means making and keeping a copy of some government-issued identification card or document (such as a drivers license, passport, military ID, etc.) or a Social Security Number (the SSN is just an option at this point, but it may become a requirement) together with other personal information. When that’s done, the dealer has collected personal nonpublic information and must provide a Privacy Notice. Then, in the language of the GLB Privacy Act Rules, if someone enters into a contract with you to buy a car and you extend credit or arrange for

By ADR Staff

someone else to extend credit, that person becomes your customer. In the leasing context, once someone enters into a lease agreement with you, that person becomes your customer, too. Whether leasing or arranging credit, you must give the customer a privacy notice no later than the time of signing of the retail installment contract or lease agreement, even if you do not disclose that person’s personal information to others. Also, there is a phrase in the rules stating, “All financial institutions (dealerships) need to share customers’ personal information to run their everyday business.” The rules further state, “For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or to report to credit bureaus,” which are reasons you must share customers’ information to do business. In other words, it appears to be their intent that all retail dealers of motor vehicles will need to provide Privacy Notices to their customers. Sales to other businesses are the only exceptions allowed. It is true these model forms are optional, however, they have been provided by the FTC as models dealers may use as so-called safe harbors. In other words, if a dealership makes proper use of these forms as its privacy policy and privacy notices, it is in compliance with the GLB Act and are therefore safe from potential penalties. Compliance with the act and the FTC Privacy Rule needs to be taken seriously because the penalties for violations can be continued on PAGE 18

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quite severe. Listed below are the sanctions that can be taken against companies that don’t act in accordance: Penalties for Violations of GLB Act A civil penalty of not more than $100,000 may be accessed for each violation Dealership principals and staff are subject to, and personally liable for, a civil penalty not more than $10,000 for each violation Fines imposed in accordance with Title 18 of the United States Code, or imprisonment for not more than five years, or both If the violation occurs while violating another federal law, or as a part of a pattern of any illegal activity involving more than $100,000 within a twelve-month period, a fine of up to twice the amount provided in Title 18 and imprisonment for more than ten years, or both Implementation of Cease and Desist Orders barring policies or practices deemed in violation of the Act’s privacy provisions Removal of the company’s management, including directors, officers, etc., and potentially barring them, permanently, from working in a financial institution including a dealership. This is one of the reasons ADR is providing this opportunity for dealers to comply with the federal law. You are not being forced to take

advantage of the ADR work effort, but it is there for you if you want to use it. The following is an FTC listing of actions that require dealers to provide privacy notices. You can decide whether your dealership fits into any of these categories. The FTC’s Privacy Rule and Auto Dealers: FAQs The FTC has developed these additional FAQs to help dealers comply with the GLB Act and the FTC’s Privacy Rule. The following questions and answers show how the rule applies to specific situations dealers may face. Other business guidance is available on the FTC website at http://ftc.gov/privacy/ privacyinitiatives/financial_rule_bus.html. Please note this information does not address possible legal obligations you may have under the FTC Safeguards Rule, the Fair Credit Reporting Act, or other federal and state laws (such as the USA Patriot Act). Activities and Entities Covered by the Privacy Rule 1. Does the Privacy Rule apply to me? The Privacy Rule applies to car dealers who: Extend credit to someone (for example, through a retail installment contract) in connection with the purchase of a car for personal, family, or household use; Arrange for someone to finance or lease a

car for personal, family, or household use; or Provide financial advice or counseling to individuals. If you engage in these activities, any personal information you collect to provide these services is covered by the Privacy Rule. Examples of personal information include someone’s name, address, phone number, or other information that could be used to identify them individually. The Privacy Rule applies if you collect personal information about someone in connection with the potential financing or leasing of a car, even if that person does not fill out a formal application. 2. Do I need to give a privacy notice to everyone who walks into my showroom? You don’t need to give a privacy notice to someone who simply expresses an interest in buying a car from you or asks general questions about financing or leasing. However, if a person gives you personal information in connection with a potential transaction, even without completing a formal application – for example, if they give you personal information to get a quote on a financial package – you may have other obligations. For more information, see Question 3. 3. When do I have to give someone a privacy notice? The answer depends on whether the person

Knowing that your dealership is ready for the future. The world is quickly changing around us, and it’s up to you to keep your business alive. ADR Consulting is here to help. Our one day, One On One Consulting Sessions are designed to help you grow your business through branding and use of Social Media. Let us help you on your unique journey in these times of constant flux.

To Learn More Call (888) 292-8080 or visit http://adrconsulting.us/confidence 18

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is a consumer or a customer – words that have their own meanings under the Privacy Rule. A person becomes a consumer when that person gives you personal information in the context of possibly financing or leasing a car from you. You only need to supply a privacy notice (and an opt-out notice) if you intend to disclose that person’s personal information to nonaffiliated third parties. However, there are exceptions to this requirement which are set forth in sections 313.14 and 313.15 of the Privacy Rule. These exceptions include disclosures to process a transaction requested by the consumer, disclosures made with the consumer’s consent, and disclosures for law enforcement purposes. If someone enters into a contract with you to buy a car and you extend credit or arrange for someone else to extend credit, that becomes your customer. In the leasing context, once someone enters into a lease agreement with you, that person becomes your customer, too. Whether leasing or arranging credit, you must supply a privacy notice no later than at the time of signing of the retail installment contract or lease agreement — even if you do not disclose that person’s personal information to others. For more information about your general responsibilities to consumers and customers, see Section II of How To Comply with the Privacy of Consumer Financial Information Rule of the Gramm-Leach-Bliley Act; Section B of the Frequently Asked Questions for the Privacy

COMPLY Regulation; and 16 C.F.R. §§ 313.4(a) and 313.10(a). 4. I lease cars to individuals. How does the Privacy Rule apply to me? If you lease cars on a non-operating basis where the initial term of the lease is at least 90 days, the Privacy Rule applies to you. Nonoperating means the lease agreement does not include maintenance or repair services, unlike, for example, car rental services. As for when you have to give a person a privacy notice, the same rules outlined in Question 3 apply to you. 5. Is all the information I obtain in connection with financing or leasing a car covered by the Privacy Rule? In general, the Privacy Rule covers personal information you obtain in the course of financing or leasing a car for personal, family, or household use. However, it doesn’t cover personal information obtained in the course of a sale that you don’t help to finance (e.g., where the individual secured his own financing or paid in

COMPLIANCE WITH THE ACT AND THE FTC PRIVACY RULE NEEDS TO BE TAKEN SERIOUSLY BECAUSE THE PENALTIES FOR VIOLATIONS CAN BE QUITE SEVERE. LISTED BELOW ARE THE SANCTIONS THAT CAN BE TAKEN AGAINST COMPANIES THAT DON’T ACT IN ACCORDANCE:

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cash), sales figures that don’t contain personal information and general retail sales data that isn’t derived from information about how individuals financed or leased their cars. To illustrate how this works: A list of all the retail customers who bought cars from you falls outside the Rule — assuming the list doesn’t reveal how they paid for the car and isn’t derived from any information about how their purchases were financed. However, if the list specifies which customers financed or leased their cars, it would be covered by the Rule. A list of people who applied to you to finance or lease a car would also be covered. Disclosures to Service Providers 6. As a courtesy to my customers, I sometimes hire an outside marketing company to send holiday greeting cards or advertisements about specials in my service department. To do this, I have to give the marketing company my customers’ names and addresses. I’ve provided my customers with a privacy notice, but because I don’t usually disclose their information except as required by law, I haven’t given them an opt-out notice. Do I now need to give an opt-out notice to my customers before disclosing this information to the marketing company? If you want to send flyers to all of your customers, you don’t need to give them an opt-out notice as long as you don’t distinguish between those who financed or leased and those who didn’t. A list of all your customers – without reference to whether they financed their car or paid for it outright – falls outside the Privacy Rule, as long as the list wasn’t derived from information about how they obtained their car. For more information on privacy notices and opt-out notices, see Section II of How To Comply with the Privacy of Consumer Financial Information Rule of the Gramm-Leach-Bliley Act. 7. A follow up to Question 6, but instead of sending the mailing out to all my customers, I want to send it out only to those customers for whom I arranged financing. Do I need to give an opt-out notice before I give the outside marketing company my customer list? In this situation, the Privacy Rule applies because you derived the list from the provision of a financial service. However, the service provider exception to the Privacy Rule lets you give the marketing company your finance customer list without providing an opt-out notice if you meet both the following requirements: You gave your customers a privacy notice during your initial transaction that includes a statement that you share nonpublic personal information in order to market your own products or services and you enter into a contract with the marketing company that prohibits it from disclosing or using the information except to carry out the marketing you have requested. If you don’t meet both these requirements, you must give people an opt-out notice and a reasonable opportunity to opt out before disclosing their personal information to

the marketing company. If you send the mailing out yourself, without disclosing any information to third parties, you don’t have to meet the requirements stated above. For more information on opt-out notices, see Section F of the Frequently Asked Questions for the Privacy Regulation and 16 C.F.R. § 313.10. For more information on the “service provider” exception, see Section G of the Frequently Asked Questions for the Privacy Regulation and 16 C.F.R. § 313.13. Remember that even if you do not have to give an opt-out notice, you may still be required to give annual privacy notices that describe your privacy policies and practices. Financing 8. When someone agrees to finance the purchase of a car with my dealership, they sign a retail installment contract. I immediately assign the contract to a third party lender. Do I have to give a privacy notice to the purchaser? Yes. When a dealer enters into a retail installment contract with a person to finance the purchase of a car, the dealer is the creditor on the contract and is contractually bound by its terms. Because the dealer has extended credit, it has established its own customer relationship with the person when they sign the contract. Therefore, under the Privacy Rule, you must give a privacy notice no later than when the borrower signs the contract, even if you intend to assign the contract to a third party lender. See 16 C.F.R. § 313.4(a) (1) for more information. Once the contract is assigned to a third party lender, you no longer have a customer relationship with the individual borrower and you are no longer responsible for providing annual privacy notices to this person. However, you are still bound by the terms of the initial privacy policy you gave the person, and you must continue to honor any opt-out requests you have received. 9. When the retail installment contract is assigned, does the third party lender have to give a privacy notice? If so, when? When you assign the retail installment contract, including the servicing rights, to a third party lender, that lender now has a customer relationship with the individual borrower. Since the customer relationship was not established at the customer’s election, the third party lender must deliver its privacy notice to the customer within a reasonable time after it buys the contract. Alternatively, if the third party lender is known when the customer signs the retail installment contract, that lender may arrange to have the dealer give the lender’s privacy notice to the customer when the dealer gives its own notice. In addition, the third party lender must give the customer an annual notice for as long as the customer relationship continues. See 16 C.F.R. § 313.5(a) for more information. 10. I extend credit to people who buy cars from me through retail installment contracts. I keep the contracts and do not assign them to others. What are my obligations? Where you do not assign the contract, the

people remain your customers and you need to give them an initial privacy notice, an opt-out notice (if applicable), and an annual notice for as long as the customer relationship lasts. See 16 C.F.R. §§ 313.4(a), 313.5(a)(1), and 313.10(a) (1) for more information. 11. I receive personal information from someone who applies for financing for the purchase of a car. After processing the application, I decide not to accept the application for credit. I have no plans to share this person’s information, other than as required by law. Do I have to give this individual a privacy notice? No. A person whose application for credit has been denied is considered a consumer – not a customer – and therefore you do not have to give them a privacy notice as long as you do not share their personal information. See Question 3 and 16 C.F.R. §§ 313.3(e)(2) for more information about privacy notices and consumers. Disclosures Under Exceptions to the Notice and Opt-Out Requirements 12. When I sell a car, I am required by law to report certain information about the sale to the manufacturer for recall purposes, whether I arrange financing for the purchase or not. Can I continue to report this information about the sales I finance to the manufacturer under the Privacy Rule? Do I have to give an opt-out notice to the buyer? In general, you must give an opt-out notice before you share information with nonaffiliated third parties. A manufacturer is not considered your “affiliate” unless it controls your management or your policies, or you are under common control with the manufacturer. However, there are situations when you may share personal information with nonaffiliated third parties without providing consumers an opportunity to opt out of the disclosure. These limited circumstances are listed in sections 313.14 and 313.15 of the Privacy Rule. In this situation, you are reporting on behalf of your dealership to the nonaffiliated manufacturer under an exception that permits disclosure to comply with federal, state, or local laws. You would not need to give an opt-out notice to the buyer. However, because the manufacturer received the information from you under one of the exceptions to the opt-out requirement, it may not use the information for unrelated purposes like marketing. See 16 C.F.R. § 313.11(a). You may also disclose general retail sales data to the manufacturer about all your customers — even if you are not required to do so by law — as long as the data does not reveal information about how the customers financed their purchases. See Question 5 above. 13. Occasionally, a third party lender whom I contact denies a consumer’s application for financing. Can that lender give me the reasons for the denial so I can let the consumer know? Yes. When you send an individual’s application for financing to a third party lender, the lender can give you information about why the loan was denied so you can give the

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information to the applicant. The Equal Credit Opportunity Act (ECOA) permits a creditor (here, the third party lender) to disclose the reasons for taking an adverse action through a third party (here, the car dealer) when the third party submits an application to a creditor on behalf of the consumer. The car dealer must comply with the notice requirements of section 202.9 of Regulation B under ECOA, including providing the consumer a statement of the action taken and the reasons for the denial. In this situation, the third party lender is disclosing information to you to comply with federal law, as permitted by the Privacy Rule. Because you receive personal information from the third party lender under an exception to the Privacy Rule, your ability to use and disclose the information is limited. The limits are discussed in Section G of the Frequently Asked Questions for the Privacy Regulation. 14. When I assign or sell a lease or retail installment contract to a third party lender, do I have to give an opt-out notice to my customers? No. The disclosure of personal information to a third party lender is allowed under the exception to the Privacy Rule concerning secondary market sales, including sales of servicing rights or similar transactions related to a consumer’s transaction. 15. Car manufacturers generally require dealers to complete a retail delivery report

(RDR) about every purchase or lease transaction. Under the Privacy Rule, am I allowed to disclose this information to the manufacturer? General retail sales information about everyone who buys cars from a car dealer can be provided on the RDR because this information falls outside the scope of the Privacy Rule. Information like name, address, vehicle make and model, and vehicle identification number may be disclosed because these categories are not related to whether or how the car was financed. However, any personal information you obtain in the course of financing or leasing is covered by the Privacy Rule. This includes the fact that a car has been financed or leased or any other information derived from the financing or leasing. For example, if the RDR not only has customers’ names, addresses, and vehicle information, but also notes which customers financed or leased their cars, the Privacy Rule would apply. Therefore, unless the disclosure of this information falls within one of the exceptions under sections 313.14 or 313.15, you cannot give the information to the nonaffiliated manufacturer unless you first give the customer an opt-out notice and a reasonable opportunity to opt out. Where the personal information is disclosed under an exception, the manufacturer may use the information only for that purpose and can’t use the information to market to those customers.

16. When I lease cars to individuals, there is often a manufacturer’s rebate offered in connection with the lease. For my customers to qualify for the rebate, I need to disclose personal information from the lease transaction to the manufacturer. If the customer wants the manufacturer’s rebate, do I have to give an opt-out notice to her before sending the information to the manufacturer? No. In this case, you are processing a transaction at the individual’s request, and can disclose personal information to nonaffiliated third parties like the manufacturer to process the rebate. However, you may disclose to the manufacturer only information necessary to process the rebate. Further, the manufacturer may use this information only to process the rebate and may not use it for other purposes, such as marketing. FOR MORE INFORMATION

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-3824357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

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Following convening of the meeting and approval of the Minutes of the previous meeting, Chairman John Longacre called on Director John Maile for the Director’s report. Maile began his report by presenting the September Financial Report to the Commission, explaining the revenues are running a little behind this same time last year. Maile went on to report to the Commissioners the Oklahoma Tax Commission has agreed to report certain improper title processing coming from dealers, including failure to put the $3.50 tax stamp on titles. A pattern of such discrepancies will warrant a visit by the Commission staff to those dealers. Chairman Longacre then called on Deputy Director Kenneth Whitehead for his report. Whitehead indicated District Court action for the month resulted in three injunctions being granted. Those injunctions were against John Cornelius with Oklahoma Wrecker and Equipment for failing to have a used dealer license, Hugh Grayson for buying cars out of the salvage pools and selling them without a license, and Country Classic Homes for taking money for mobile homes and failing to deliver the homes. There were two informal hearings during the month, one of which was resolved without further action, and one that resulted in a fine of $500 for temporary tag violations. Whitehead’s written report indicated Commission staff had issued six cease and desist letters (a listing of those letter recipients is included following this report). Investigators completed 18 inspections for the period. Staff handled 28 written complaints, eight of which were title issues, nine had to do with contract violations, nine were related to mechanical issues and there were two complaints of a miscellaneous nature. Whitehead reported for the period, the Commission education program had 13 in attendance. Applicants for a new license and dealers involved in significant rule violations are required to attend the Commission’s education program as a part of acquiring or maintaining a state license. Until further notice, these education sessions are being held at the Commission conference room at 2401 NW 23, Oklahoma City. Classes are held on Monday prior to the Commission meeting on the second Tuesday of each month. The sessions run from 9 a.m. to about noon or 1 p.m. You are asked to make reservations so staff can be prepared to accommodate you. Call the Commission at 405-521-3600 to make your reservations.

Used Motor Vehicle and Parts Commission Report REPORT OF CEASE & DESIST LETTERS ISSUED These letters direct the individual or business to cease violations of laws or rules. ENTITY

TYPE VIOLATION CITY

Leonard Baca Ryan Clanton used dealer Montiel’s Wrecker Service dismantler Montiel’s Wrecker Service used dealer Pacheco Auto used dealer Gabriel Reyes insurance pool

Edmond Oklahoma City Tulsa Tulsa Oklahoma City Tulsa

DATE ISSUED 10/06/10 10/13/10 10/14/10 10/14/10 10/14/10 10/06/10

CLOSED COMPLAINT REPORT

These are complaints that have been resolved one way or another. They do not necessarily reflect any wrongdoing on the part of dealers.

ENTITY A&G Auto #2 Ada Auto World Affordable Car Sales Belter’s Used Cars Big Red Sports & Imports Bob Moore Nissan of Norman, LLC Bryan’s Car Corner III Calvary Motors, Inc. David Stanley Dodge, LLC Express Credit Auto #2 Express Credit Auto, Inc. Fisher’s Auto Mall, Inc. Fowler Honda Good Deal Auto Sales Good Ole Used Cars I-35 Credit Auto I-35 Credit Auto I-35 Sports & Imports Joe Cooper Ford of Shawnee, LLC Joe Cooper Ford of Yukon, LLC Lineberry’s Auto Sales Norman Chrysler-Jeep-Dodge Sandy Creek Cars Speedway Chevrolet Triple T Motors, LLC Warranty Motors

CITY Oklahoma City Ada Oklahoma City Clinton Norman Norman Oklahoma City Catoosa Midwest City Oklahoma City Oklahoma City Oklahoma City Norman Tulsa Lawton Oklahoma City Oklahoma City Moore Shawnee Yukon Sallisaw Norman Byars Broken Arrow Oklahoma City Ponca City

COMPLAINT contract contract mechanical mechanical contract contract mechanical title contract contract mechanical contract mechanical title title title title title mechanical mechanical title mechanical title miscellaneous mechanical contract

RESOLVED 10/04/10 10/26/10 10/14/10 10/05/10 10/14/10 10/15/10 10/26/10 10/13/10 10/07/10 10/22/10 10/11/10 10/05/10 10/22/10 10/14/10 10/01/10 10/05/10 10/07/10 10/04/10 10/08/10 10/15/10 10/13/10 10/19/10 10/18/10 10/14/10 10/25/10 10/15/10

LICENSES SUSPENDED OR ABANDONED Aubrey Chevrolet – Lawton - Out of business; change of ownership. Auto Plus of Woodward – Woodward - Out of business; phone disconnected. Cowpoke Auto Sales – Oklahoma City - Out of business; per owner, Ron Fisher. Lochwood Motors, LLC – Oklahoma City - Out of business; per owner, Gretchen Van Gorder. Malik Auto Sales, Inc. – Lawton - Out of business; change of ownership. McClain’s RV Superstore – Oklahoma City - Out of business; change of ownership. S & M Auto Sales – Oklahoma City - Out of business; phone disconnected. Ten St. Auto Sales – Clinton - Out of business; per Investigator’s report. W & W Used Cars – Weatherford – Out of business; phone disconnected.

Applicants for a new license and dealers involved in significant rule violations are required to attend the Commission’s education program as a part of acquiring or maintaining a state license.

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November 9, 2010 CONSENT AGREEMENT APPROVED The Commission approved the following Consent Agreement: A Consent Agreement between UMV&PC and Jim Norton Toyota of Lawton, LLC, a limited liability company, a licensed used motor vehicle dealer, hereinafter referred to as “Respondent”. The following is a summary of the facts concerning the investigation by Commission personnel of the above referenced Respondent, the violations of the used motor vehicle licensing laws and/or Rules of the Commission, the possible sanctions which may be imposed, and the sanctions the Respondent has agreed to in order to resolve this investigation. Respondent has used its temporary license plates (temp tags) in an improper or unauthorized manner in that Respondent has issued more than one temp tag in a single used motor vehicle sales transaction. This violation was observed to have occurred a total of fourteen (14) times. Respondent has failed to deliver certificates of title to vehicles sold at least two (2) times.

Respondent acknowledges that in the event of a hearing before the Commission, the sanctions could, in addition to the assessment of fines of One Hundred Dollars ($100) per violation, include suspension or revocation of Respondent’s used motor vehicle dealer’s license. Respondent agrees to pay to the Used Motor Vehicle and Parts Commission for said violations as follows as full and complete disposition of this matter: Respondent therefore agrees it will pay to the Used Motor Vehicle and Parts Commission the sum of One Thousand Six Hundred Dollars ($1,600), payable by the last day of the month in which the Commission approves this Consent Agreement. In the event the sum is paid as agreed, said payment will constitute full and final action on all violations pending or which may be charged against Respondent at the time of this agreement. In the event said sum is not paid as agreed, Respondent acknowledges further action may be taken, which may include a formal hearing for the revocation of Respondent’s used motor vehicle dealer’s license.

R E S O LV E T O C O M P LY W I T H R I S K- B A S E D P R I C I N G R U L E We don’t mean to harp on it, but the Risk-Based Pricing Rule went into effect the first of January. Are you prepared to implement it? The Risk‐Based Pricing Rule (RBPR) implements Section 311 of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act) and was jointly issued by the Board of Governors of the Federal Reserve and Federal Trade Commission (FTC). As of now, most dealers that obtain credit reports and extend credit to consumers must provide a new notice, known as a Risk‐Based Pricing Notice (RBP Notice), to consumers who receive credit from them but on credit terms less favorable than the terms received by a substantial proportion of their other credit customers. This notice is different from an Adverse Action Notice, as that is provided when credit is denied or not extended on substantially the same terms as was requested by the consumer. Instead of issuing the RBP Notice, dealers can issue an alternative notice, known as a Credit Score Disclosure Exception Notice to all of their consumer credit applicants, regardless of whether or not credit is ultimately extended. Consequently, a credit applicant who was ultimately turned down would receive both the Exception Notice and an Adverse Action Notice. In multi‐party credit transactions, such as a typical transaction where a dealership enters into the retail installment sales contract

and subsequently assigns the contract to a finance company, the party to whom the credit obligation is initially payable – the dealership – is responsible for issuing the RBP or exception notice. A dealer must comply with the RBP rules when it makes sales to consumers for personal, family or household purposes if it (1) obtains credit reports and (2) engages in risk‐based pricing. Business-to-business transactions do not require a notice. The Credit Score Exception Notice generally must be provided to every consumer who applies for credit regardless of whether or not credit is extended. An exception notice is not required for guarantors or co‐signers who are not applying for credit but rather are only assuming liability for those who are. An exception notice must contain the following information: • The consumers current credit score; • The date on which the credit score was created; • The name of the credit reporting agency or other person that provided the score; • The range of possible credit scores in the credit scoring model used to generate the credit score; • And either a bar graph that breaks down the range of possible credit scores into at least six bars with each bar indicating the percentage of consumers with credit scores that

fall within the range of scores for that bar, or a clear statement indicating how the consumer’s credit score compares to other consumers (i.e., “Your credit score ranks higher than __ % of U.S. consumers”). This information is generally obtained from the credit reporting agency from which the credit score is obtained. Dealers should keep a copy of the notice given to the customer for its records. If a credit score is unavailable from a credit reporting agency for a particular customer dealers are to issue an alternate type of exception notice similar to the exception notice discussed above, but does not require the consumer’s credit score. Model disclosure forms for both types of exception notices are available from the FTC website. Proper use of these safe harbor forms provides that creditors will not be liable for failing to perform the duties the rule imposes if, at the time of failure, the creditor maintained reasonable compliance policies and procedures. ADR is prepared to assist dealers in preparing the Risk-Based Pricing Notice for their dealership. Dealers should consult their legal counsel regarding the preparation of the proper compliance policy. Failure to comply with the RBPR can lead to penalties of $3,500 for each knowing violation and increased penalties of up to $16,000 for future violations arising out of repeated failures to comply with the rule.

ADR staff

EFFECTIVE JANUARY 1, 2011

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RESOLVE TO be Organized:

P E R S O N A L

O R G A N I Z A T I O N

One of the things I have discovered about the most successful auto dealers is their ability to handle a variety of tasks, problems, issues, responsibilities and all challenges at the same time, yet still come back for more tomorrow!

This would not be possible if they lacked personal organization. Not to confuse you, but I am not talking about time management (another future article), but personal management. What you can do in a framework of passing time is just manage all the stuff; decisions, problems, resources, customers, employees, successes, failures, risks, paperwork, as well as all the activities in your daily life. I am listing a few of my suggestions to help you get better at personal organization: Start with a written plan (list) on what you want to accomplish for the time period Most important is to prioritize that plan (list) Stay focused on your plan (list) Eliminate all the clutter in your daily routines (if you have not used it in last 10 days to help sell a vehicle, why keep it around?) Concentrate on the list one item at a time (see it through completion) Do not pursue anything you aren’t truly passionate about Include routines for those pleasurable daily tasks (reading or study)

dealership (In other words, play when its time to play, work when it’s time to work and don’t mix the two!) Have fun, enjoy life and this crazy profession you have chosen. Use all the available technology as a tool, not a crutch Nowadays, it is much too easy to rely on technology as a sales tool to contact new customers, maintain current or past customers, handles sales and service issues, and obviously many routine daily functions. I believe technology is a wonderful tool and has made it possible to save time when trying to stay in touch or attract new customers, but at what cost? In my opinion, relationships, especially auto sales and service relationships, are all about people! Our customers want and need and expect personal contact. How often do you send an e-mail instead of picking up the telephone? How many times a day do you text somebody instead of a healthy conversation? Do you set sales or service appointments over the Net? Here again, I believe technology lets us get more done daily and is easier and (most of the time) faster. I do cherish the new technology currently available, but do you know what I cherish more? Personally talking with my customers, prospective, past and present! One of my favorite expressions in developing and maintaining sales relationships is eyeball to eyeball and belly to belly! Nothing can replace that warm and fuzzy feeling generated with one of your customers, not the fastest computer or award-winning website or smallest handheld texting unit. Go ahead and label me old school or better yet, technologically challenged, but humor me and try the following for the next 30 days and monitor your results within yourself: Personally call one prospective customer instead of sending him an e-mail.

Get up earlier and go to bed later!

Personally call five previous customers, (not to sell), but just to say, “Hi, how is the world treating you?”

Organize your personal workspace so you can be more productive (how many stress squeezers on your desk?)

Personally call a close relative or close friend just to tell them you were thinking about them.

You must learn to say no more often

Finally, do not assume everyone you contact (especially customers) are as technologically advanced as you are. My final thought for you:

If you are procrastinating on something on your list, ask why? Use mentors (two or three heads better than one)

When you do say yes, mean it (do not make commitments or promises you can’t keep) Respect and value your quality free time away from the

Better organization means improved effectiveness Improved effectiveness means better performance Better performance means positive attitudes

Positive attitudes, better performance and improved effectiveness all equal increased sales, profit results and quality of life! After all, aren’t those your daily objectives?

By Rod A. Heasley, Autosave/Charter Warranty

Rod Heasley is the director of sales in the U.S. and Canada for Charter Warranty/Autosave Division. Autosave is the nationally recognized, original 5-year/100,000-mile engine and transmission warranty program. Rod has more than 26 years automotive industry experience in retail sales and management operations, and motivational auto sales training. Rod can be reached at 800-684-1175 or rodh@autosave.com. 24

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LICENSE APPLICANTS APPROVED The following applicants, as listed in the Agenda for the Used Motor Vehicle and Parts Commission Regular Meeting of Nov. 9, 2010, were considered for issuance of used motor vehicle dealer licenses and wholesale vehicle dealer licenses. The applications were approved pending compliance with the State licensing laws and rules, and subject to final approval by Commission staff.

USED DEALER LICENSES

COMPANY Austin Motors Choctaw County Cheve, Buick, GM *Cowboy Auto Sales Hobart Auto Auction I-44 Auto Center, LLC Joe Cooper Explorer Motors Kamphaus Motors Kiko’s Autos Lindley’s used Cars, LLC Mimi Auto Patriot Auto Sales Phoenix Rising Motors, LLC R V General Store, Inc.-OKC Rex Morgan Cars, LLC Sirtedd’s Auto Sales & Brokerage Warranty Motors II

NAME CITY Tracy Whyburn Tulsa Nick Theofiledes Hugo Jose Manuel Delgado Clinton Berlin Barnes Hobart Darren Reese Bothell Tulsa Gregory J. Kach Midwest City Robert J. Kamphaus Granite Francisco Madera Oklahoma City Jody Lindley McAlester Pradeep K. Metpally Oklahoma City Troy Hankins Lawton Scott King Clinton Barry Bender Oklahoma City Rex L. Morgan Guthrie Teddy G. Ohadugha Oklahoma City Mark Ross Stillwater

WHOLESALE USED DEALER LICENSES COMPANY Automay Car Sales, Inc. *Swift Motors

NAME CITY Amir Shadaram Oklahoma City Soliman Dogha Stillwater

*Subject to review of financials

OIADA NEW AND RENEWAL MEMBERS The following list includes members who joined or renewed their OIADA/NIADA membership during September. We express our sincere appreciation for all the members of OIADA and we extend our invitation to dealers who are not members. A membership application can be found elsewhere in this newsletter. We urge you to be an active part of maintaining a strong and effective used car industry voice in the legislative and regulatory environment. With the current Congress, we need that voice more than ever! John Easttom, President

COMPANY R D & D Used Cars R Temple of Zoom Motorsports R Don Hickey Used Cars R Mitchell Motors, Inc . R Atoka Wholesale Motors R Brookside Motorcycle Co. R Randy Mitchell Auto R Oklahoma Auto Exchange, LLC R Terry Halbert Auto Sales, Inc. R Shreve Truck & Equipment Sales N Norris Auto Sales R #9 Auto Sales N Cycle Ward, LLC R Broken Arrow Motor Co. R L & J Car Sales, LLC R Auto Showcase of Tulsa, LLC R Albright Insurance, Inc. N United Acceptance R Smart Auction N CAR Financial Services, Inc.

NAME Danny Dowdell Mike Northrup Don Hickey, Inc. Jesse Don Mitchell Paul Kisinger Paul Rogers Randy Mitchell Mike Clopton Terry Halbert Terry Shreve Randy Dunn John Fletcher Misty Silver KCAR Enterprises, Inc. Larry Logue Auto Showcase of Tulsa, LLC Daren Wilson United Acceptance Jerry Weston Caleb McClung

JOINED CITY 1991 Clinton 2008 Coweta 1993 Oklahoma City 2000 Stillwater 1993 Atoka 2009 Tulsa 1993 Muldrow 2005 Oklahoma City 1998 Yukon 2005 Barnsdall 2010 Edmond 2000 Tecumseh 2010 Enid 2003 Broken Arrow 2002 Cache 2003 Tulsa 1991 Ponca City 2010 Smyrna, GA 2008 Lewisville, TX 2010 Blanchard

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IMPROPERLY ASSIGNED OR REASSIGNED TITLES The Used Motor Vehicle and Parts Commission (UMV&PC) and the Oklahoma Tax Commission (OTC) are working together to reduce the incidence of dealers issuing improperly assigned or reassigned titles and titles that don’t have the necessary motor vehicle tax stamp affixed to them. When a customer presents such a title to a motor license agent, the OTC

has asked the agent fax a copy of that title to the UMV&PC. It is the intention of the UMV&PC to audit the offending dealer’s records to determine the extent of the problem and take corrective action. Use of the motor vehicle tax stamp is a major benefit to dealers, because it is used in lieu of ad valorem taxes. This is just a friendly reminder: what the legislature giveth, the legislature can take away. Also, in regards to another element of the tax stamp issue, the OTC Legal Division has issued another reminder to motor license agents that they are not statutorily authorized to sell or provide motor vehicle tax stamps to any taxpayer or dealership and are therefore directed not to do so. If presented with dealer documentation lacking the required motor vehicle tax stamp, motor license agents are directed to advise the taxpayer to contact the selling dealer to resolve the issue and report the discrepancy to the UMV&PC.

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Oklahoma Dealers Resource  

Oklahoma Dealers’ Resource is produced by the National Independent Automobile Dealers Association (NIADA) exclusively for used vehicle deale...

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