the Front Row - SEPT/OCT 2017

The official publication of the Washington State Independent Auto Dealers Association

September|October 2017

Remembering Mac

Dedicated dealer, servant leader and scholarship namesake

Call to Action Saving arbitration from the Grim Reaper

Safeguarding Customer Information Rules, Regulations and Compliance

PLUS...

Mac Ruddell Scholarships

Outstanding Auctions. Signature Events.

DAA Northwest | Spokane, WA

September 20-21 3200 Cars and Trucks Steak Kabobs in the Lanes During Thursday’s Sale!

A McConkey Auction Group family tradition for more than 60 years.

Wednesday | October 18 | 2:00 PM Thursday | October 19 | 9:00 AM

Moose Cap Giveaways in the Lanes!

DAA Seattle | Auburn, WA

The McConkey Auction Group family tradition continues.

Friday, September 15 9:00 AM - 1000 Units

Friday | October 13 | 9:00 AM

Fresh Grilled Salmon Served in the Lanes!

Authentic Moose Sandwiches at Both Sales!

JOIN US AT DAA NORTHWEST EVERY THURSDAY AT 9:00 AM, AND IN SEATTLE EVERY FRIDAY AT 9:00 AM

DAA NORTHWEST | Spokane, WA KCI KANSAS CITY | Kansas City, MO DAA SEATTLE | Auburn, WA mcconkeyauctions.com

SPOKANE, WA daanw.com

AUBURN, WA daaseattle.com

All information subject to change without notice

The official magazine of the

WASHINGTON STATE INDEPENDENT AUTO DEALERS ASSOCIATION

707 Auburn Way South Auburn, WA 98002 T: 253-735-0267 | F: 253-804-0844 staff@wsiada.com WSIADA.COM Mo Aliabadi, Board President South Tacoma Auto Sales, Inc. mo@southtacomaauto.com Randy Fletcher, President Emeritus In N Out Auto Sales inandoutwa@gmail.com

SEPTEMBER|OCTOBER 2017

COVER STORY: Find out why our Scholarship Program is named for former WSIADA Board President Mac Ruddell.

Page 10.

Vacant, Board Vice President Emil Scarsella, Board Treasurer Town & Country Auto Sales e.scarsella@hotmail.com Vacant, Board Secretary J.T. Curry, Board President Emeritus Motors Northwest jt_curry@motorsnorthwest.com Ken Williamson, Board President Emeritus John’s Auto Mart, LLC johnsautomart@msn.com AJ Hamedian, Chapter President – North Sound Excellent Choice Auto Sales, LLC ahamedian@yahoo.com Rachel Frankel, Chapter President – Vancouver Top Auto Brokers, LLC | topautobrokers.com Daniel Pizzarella, Chapter President – Tri Cities TriCities Auto Remarketing | dpizzarella@gmail.com Vacant, Chapter President – Yakima Vacant, Chapter President – South Sound Brian Corigliano, Chapter President – Spokane Globe Motors | globemotorsusa.com WSIADA STAFF Todd C. Elliott, Executive Director Colette Eilers, Receivables/Payables Michael McGaughy, Spokane Auctions Rick Olson, Member Services Ashlie Seipert, Education Services PRODUCTION EDITOR Sygnifi Networks wsiada@sygnifi.com Copyright 2017 MEMBER

contents 3 | President’s Message 4 | Events Calendar 5 | Executive Director’s Message 6 | New and Renewed Members 7 | Save Arbitration from the Grim Reaper 9 | Auction Listing 10 | Cover Story: Mac Ruddel 12 | Scholarships and Education Fair 14 | Safeguards Rule: Privacy & Security Checklist 16 | Safeguards Rule: Code of Federal Regulations 18 | Service Providers Directory 21 | Read and Respond Continuing Ed Quiz 23 | WSIADA Membership Enrollment Form 24 | Just for Fun

Full Spectrum Lender ● Prime to Sub-prime Instant Online Approvals 24/7 ● ACH Funding Consistent Decisions ● Reliable Service ● Proven Stability Purchasing Motor Vehicle Retail Installment Sales Contracts

© 2017 Lobel Financial. All rights reserved.

Point of Sale ● BHPH

Servicing Washington: 253.839.2600 www.lobelfinancial.com | Training ● Support: 800.871.8051

2 | the Front Row | wsiada.com | September/October 2017

ADVERTISER INDEX

PRESIDENT’S MESSAGE

P

Who is Mac Ruddell and why is there a scholarship named after him?

Mo Aliabadi, President, South Tacoma Auto

lease thank our sponsors for their generous support by considering their services and mentioning that you saw them here!

Adesa Seattle . . . . . . . . . . . . . . . . . 9 AUL . . . . . . . . . . . . . . . . . . . . . . . . . . 4 AutoZone . . . . . . . . . . . . Back Cover Benchmark . . . . . . . . . . . . . . . . . . . 24 Credit Acceptance . . . . . . . . . . . . 8 DAA Northwest . . . . . . . Inside Front

R

ead this month’s cover story to find out. Mac was a local car dealer who contributed in big ways to his local community and achieved the NIADA Dealer of the Year distinction.

Mac’s life is an inspiration to all used car dealers; a reminder that we are

in a unique position to improve our local communities and to change lives for the better. We are more than “just” used car dealers. Congratulations to the students awarded this year’s Mac Ruddell scholarships – we are rooting for your success!

LeMay, America’s Car Museum . 19 Lobel Financial . . . . . . . . . . . . . . . . 2 Manheim . . . . . . . . . . . . Inside Back Rekdal Hopkins Howard . . . . . . . . 22 Shepard & Shepard Insurance . . 15 Skywerks . . . . . . . . . . . . . . . . . . . . . 20 Service Provider Directory . . . . . 18

The WSIADA Education Fairs – East and West, were a great success. Many thanks for a job well done by the Executive Director and Staff of WSIADA; gratitude to our sponsors and to our partners in Olympia, the DOL, DOR and The Office of the Attorney General.

This month’s magazine is a reminder that our industry is more than just selling cars and compliance; there’s inspiration involved too. Be Inspired!

As always, feel free to contact me.

Mo Aliabadi

TARGET YOUR ADVERTISING DOLLARS! REQUEST A WSIADA MEDIA KIT

253.735.0267

(253) 208-8090

mo@southtacomaauto.com

the Front Row | wsiada.com | September/October 2017 |

3

Events Calendar Chapter Meetings Spokane

North Sound

NOV 13 | 8:30 - 10am Griot’s Garage 3333 S 38th St, Tacoma 98409

OCT 09 | 7 - 9pm Hilton Garden Inn Spokane Airport 9015 US-2, Spokane 99224

South Sound

OCT 13 | 8 - 9:30am Holiday Inn Everett 131 128th St SW, Everett 98204 (location may change)

Vancouver

OCT 16 | 7 - 9pm Benchmark Dealer Services 1605 F St, Vancouver 98663

Tri-Cities

OCT 23 | 7 - 9pm Clover Island Inn 435 N Clover Island Dr, Kennewick 99336

Pre-Licensing Workshops

Yakima

OCT 25 | 7:30 - 9:30am Hilton Garden Inn 401 Yakima Avenue, Yakima 98901

Title Workshops (10am to 1pm)

AUG 31................Auburn HQ SEP 13..................Spokane SEP 28..................Auburn HQ OCT 24................Tri-Cities OCT 25................Yakima NOV 02................Auburn HQ NOV 08................Spokane NOV 16................Auburn HQ DEC 21................Auburn HQ

(9am to 4pm)

SEP 12..................Spokane SEP 21..................Auburn HQ OCT 10................Spokane OCT 19................Auburn HQ NOV 07................Spokane NOV 09................Auburn HQ DEC 07................Auburn HQ DEC 12................Spokane

NIADA National Policy Conference September 24 - 27 Washington DC

Digital Dealer Conference September 17 - 20 Las Vegas

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4 | the Front Row | wsiada.com | September/October 2017

EXECUTIVE DIRECTOR’S MESSAGE

E

njoy our Back to School edition! Parents lamenting the end of summer, kids cheering the start of a new school year—wa­it—I got that backwards. Anyway, “Back to School” serves as an appropriate time to kick-off our WSIADA retrospective with a special on Mac Ruddell. Rick Olson was working through our archives and came across an original mint condition issue of the 1983 NADA dealer of the year issue, with Mac prominently displayed on the cover.

We rerun the article for your enjoyment, and look forward to hearing from folks who knew Mac. In future issues of the Front Row we’ll continue to dig into the archives to reflect on times past.

Safeguards coverage is the first of a series articles on privacy. This is particularly important given the dealer requirements and the rise in identity theft and the growing numbers of data breaches.

Watch your email and WSIADA.com for further information on this call to Shaun Peterson’s article affects action for all dealers. all dealers, as he outlines why it Note the additions to the is important to support Special Service Provider Directory and Resolution 47 that overturns new features in the electronic the CFPB ruling that is a “big edition that you might not wet kiss” to trial attorneys. In have tried. You can hyperlink the end, all dealers will be directly to the Provider’s website if you see something you want to dig into further.

More on that in future issues as well.

Read and Respond launches our online training platform.

No doubt there will be bugs, so we look forward to your feedback.

For those of you interested in attending the Digital Dealer Conference in Las Vegas September 1820, there is a $400 per person discount for WSIADA Members.

Two questions dealers should ask themselves: [1] am I compliant and [2] am I covered if an event occurs.

We captured some of the critical dealer information in the Read and Respond, however, please read each article very carefully. In working with some of our Associate Members who work in this area, very FEW dealers are compliant or protected.

impacted by the outcome of the proposed legislation currently sitting in the Senate.

Embedded in Shaun’s article is a call to action. If you choose not to call our Senators, you can email them.

Finally, please keep us in mind as you run across old pictures of your lot or your friends in the industry.

Todd C. Elliott, WSIADA

the Front Row | wsiada.com | September/October 2017 |

5

WSIADA Membership We want to say “Thank You!” to the following dealerships for renewing their membership in June and July! And a “Warm Welcome!” to our newest members, who are highlighted in bold red text.

405 Motors Airport Auto RV Pawn & Sales Aromax Auto Sales Autobybun Automotive Distinctions Automotor Autoplex Motors AV Auto Sales Bara International Solution Big Boy’s Toys Auto Sales Brian Harris Used Cars Buttera Motors Camping World RV Sales CB Auto Financing D&M Motors & Towing Destination Harley Davidson Drager’s International E-Z Auto Buy Fleet Lease Exchange Frank’s Auto Sales

Goodfella’s Motor Company GT Auto Sales Inca Auto Sales Iron Technics Enterprises J & M Auto Sales J & N Investements Kent Cars Latino Auto Sales & Repair Liberty Bay Auto Center Los Amigos Messmer Motors Puyallup Car and Truck Puyallup Truck’s & RV’s Sales R & B Classic Cars R. E. Powell Dist.

Rainbow Auto Service Rod’s All Star Auto Sabeti Motors Sound Auto Land Star Cars

U-Haul Co. of Washington US Auto Care Your Turn Auto

Advertise with WSIADA! THE FRONT ROW magazine is the most effective way to reach over 1,600 automobile dealers in Washington State.

Contact WSIADA for more information about targeting your ad dollars today!

253.735.0267

Washington State Independent Auto Dealers Association

Membership Benefits • Auction discount cards... a $4,700 value!

• Dealer advocacy • Dealer hotline • 10% off most WSIADA services and products • Exclusive invitation to annual education fairs

• Legislative updates • Legal support program • Convenient billing • Regional continuing education opportunities • Subscription to the Front Row magazine

Protect your own interests and support the auto industry in Washington State. Join WSIADA or renew your membership today!

See enrollment form on page 23.

6 | the Front Row | wsiada.com | September/October 2017

CONSUMER FINANCE PROTECTION BOARD

Save Arbitration From the Grim Reaper A CALL TO ACTION

By Shaun Petersen, Senior V.P. Legal & Government Affairs, NIADA

E

ighteen months ago, I suggested in an article I wrote in NIADA’s Used Car Dealer magazine that the grim reaper was coming for arbitration as we know it. Last spring, that prediction appeared to be coming true.

On May 5, 2016, the Consumer Financial Protection Bureau announced it was proposing a rule that would prohibit certain entities – including those engaged in automotive finance, such as Buy Here-Pay Here dealers – from using mandatory pre-dispute arbitration agreements that contain a class-action waiver.

That rule proposal would allow those entities to continue to properly use mandatory pre-dispute arbitration agreements in individual disputes.

However, the companies would be required to submit information to the CFPB about the claims brought and awards given in those arbitration cases.

tion can take years to work its way through crowded court dockets.

We also reminded the CFPB that its own research shows consumers who receive an award in arbitration almost always receive more than those in class-action lawsuits. The CFPB’s analysis revealed consumers averaged more than $5,000 in recovery The CFPB said it wanted that informa- through arbitration as opposed to tion to “ensure the arbitration proless than $33 in class-action litigation. cess is fair for consumers.”

NIADA and hundreds of our dealer members rallied to file comments to the CFPB explaining the fallacy of its proposal.

We pointed out arbitration has proven to be a faster, less expensive and more effective means of resolving consumer disputes than class-action lawsuits. The typical arbitration proceeding can conclude in a matter of months, but class-action litiga-

Call Your U.S. Senator!

202.224.3121 Do you know who the big winners in class-action lawsuits are?

You got it – the trial lawyers pursuing those claims. Rep. Jeb Hensarling (R-Texas) called the CFPB’s proposed

rule a “big, wet kiss” to trial attorneys.

We also explained how the CFPB’s proposed rule will increase the cost of consumer goods. How? Businesses are forced to bear the costs of defending class actions, whether meritorious or not.

I recently had a conversation with a dealer who was wrapped up in a class-action lawsuit – that was ultimately proven frivolous – for which he had to spend upwards of $700,000 to defend. You and I know those costs will be passed to consumers in higher prices for cars and credit.

Think about credit-challenged BHPH customers who have no other place to turn for reliable transportation to get to work, get the kids to school or get to the doctor. Those increased costs could prove to be too much for them.

CONTINUED NEXT PAGE

the Front Row | wsiada.com | September/October 2017 |

7

CONTINUED FROM PAGE 7

Where do those customers then turn for financing to purchase a motor vehicle?

Our comments were among thousands the CFPB received on the proposed rule. While it was reviewing those comments, the unthinkable (for many) happened – Donald Trump was elected President of the United States and the Republicans maintained control of both chambers of Congress.

Following Trump’s Nov. 8 upset, the financial services industry waited anxiously to see what the CFPB would do.

Would it proceed with the proposed arbitration rule with a Republican-controlled government that recognizes the fallacy of the proposal for both consumers and businesses?

Or would the proposal be permanently tabled?

As the months ticked by, many began to think the CFPB had decided to retreat. Then on July 10, director Richard Cordray announced the CFPB had finalized the rule.

The final version was virtually identical to the proposed rule: Businesses would no longer be permitted to use mandatory pre-dispute arbitration agreements preventing consumers from participating in class-action lawsuits, and if individual disputes went to arbitration, businesses would be required to provide certain data to the CFPB from the arbitration proceeding.

The rule takes affect Sept. 18 and will apply to agreements entered into beginning March 19, 2018.

Now that the rule is finalized, what options do we have to continue fighting the fight?

Congress has authority to repeal the rule through through a little-known statute called the Congressional Review Act. President Trump has indicated that if Congress sends him legislation to repeal the rule, he will immediately sign it.

The House of Representatives has already passed its CRA resolution to repeal the rule. The Senate’s resolution is pending a vote sometime this month.

Now is the time for you to contact your U.S. Senators and urge them to vote in favor of Senate Joint Resolution 47 to repeal the CFPB’s anti-consumer arbitration rule.

Call Your U.S. Senator!

202.224.3121

Please feel free to use the points mentioned here to explain the harm to consumers and businesses that will come from this rule.

I also encourage you to attend the NIADA National Policy Conference, Sept. 25-27 in Washington, D.C. You can bet this will be one of topics we’ll discuss in Congressional offices during our face-to-face meetings with Senators and their staff.

For more about the National Policy If you call the Capitol switchboard at Conference, visit (202) 224-3121, an operator will conniadapolicyconference.com nect you to your Senator’s office. You can also find contact information at The time to come together to opwww.senate.gov/general/contact_ pose this poorly conceived rule with a unified voice is now! Will you rally to information/senators_cfm.cfm. the cause?

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8 | the Front Row | wsiada.com | September/October 2017

1.800.873.0512 CreditAcceptance.com

AUCTION LISTING

WSIADA PRESENTS...

For a current calendar view, visit WSIADA.com and select “Calendar” from the top navigation menu.

Adesa | adesa.com/seattle Tuesday: Consignment 9:30AM Alternate Tuesday: Specialty 8:30AM Thursday Night: InOp Sale 4:45PM

Adesa | Portland adesa.com/portland

Update all your social media sites simultaneously from a single place, schedule custom posts, attach photos, target your audience and much more!

Thursday: Consult website

Copart | copart.com Times vary: Consult website

DAA | Seattle | daanw.com Friday: Dealer and Fleet/Lease 9:00AM

wsiada.com/smartsocial

Alternate Friday: Heavy Metal*

9:00AM (Lane 8) Monthly GSA Public Auctions:

1:00pm as scheduled” *Mechanically-challenged/cosmetically damaged/non-running inventory

DAA | Northwest | daanw.com Weekly auctions: Thursdays at 9:00am; Monthly promotional event auctions:

Wednesday at 2pm & Thursday

at 9:00am. EXCEPTION: July 20-21

DAA Northwest Rock & Roll Sale –

Wednesday at 9:00am & Thursday

at 9:00am;

ARBITRATION POLICY CHANGES

Monthly MotorSports auctions:

Thursdays at 11:00am (Lane 8)

EXCEPTION: July 20

DAA Northwest Rock & Roll Sale –

Wednesday at 9:00am; Monthly RV auctions:

11:00am (Lane 8);

Heavy Metal auctions:

8:30am as scheduled (Lane 8);

Effective June 5, 2017

NOTE: MotorSports, RV and Heavy Metal auction dates can be found at daanwmotorsports.com

All ADESA auctions will adopt NAAA’s updated arbitration policy for vehicles purchased in lane or online through ADESA.com.

Policy updates include, but are not limited to: • Red light only replaces Red/Yellow combination to designate as-is no arbitration • Previous Canadian vs. grey market definition and clarification • Additional clarity on wearable vs. inherent conditions • “Permanent Damage” definition added to Structural Damage Policy • Terminology updated to remain current with industry standards

© 2016 ADESA, INC

Be informed.

• Contact the arbitration staff at your nearest ADESA auction for more information about NAAA’s new arbitration policy • Download the updated arbitration policy from NAAA.com ADESA.com

Ehli Auto Auctions | ehliauctions.com Last weekend of every month.

Kaman | kamanauctions.com Thursday: Noon

Manheim | Seattle manheim.com/locations/SSAA/events Monday: OVE Event Sales Tuesday: Alternate weeks Ford Factory

(Closed sale) - 10:00am;

Crossborder Mobile Sale - 1:00pm Wednesday: General Sale Weekly 9:00am All sale dates and times are subject to change. Please verify with the Auction or manheim.com.

Manheim | Portland manheim.com/locations/PAA/events Tuesday: Open Sale: 9:00AM the Front Row | wsiada.com | September/October 2017 |

9

COVER STORY

Mac Ruddell

A Role Model for All of Us

M

ac Ruddell was born into a dealership family in Port Angeles, Washington, working for his father until he was able to purchase land

to start his own dealership across the street from his father’s. He was a likable, friendly, man that everyone spoke very highly of in the community. Mac would be seen in a shirt and tie taking the time with customers to change bulbs for indicator lights on the car they purchased from his dealership.

He always wanted people to succeed by donating to charities, vocational schools and helping other dealers in the area to better their business. Mac joined the Washington State Independent Auto Dealer Association in the mid 1970’s with the Peninsula Chapter and eventually becoming the President of the Association from 1978 to 1980. In 1983, he won the National Quality Dealer Award with the NIADA for his work and dedication.

10 | the Front Row | wsiada.com | September/October 2017

Mac remained a staple of the Association until his unexpected passing in November 2001. In honor of all that Mac had done for the association and his fellow dealers, the WSIADA created the Mac Ruddell Scholarship Program in 2004 to help with the cost of attending college for the child or grandchild of dealers who are members of the Association.

Mac would be proud to learn that the scholarship has given $30,000 to 70+ college bound students as of 2017.

The article below is a re-print from the November 1983 NIADA Used Car Dealer magazine edition spotlighting Mac Ruddell’s selection as National Quality Dealer for 1983.

Mac Ruddell and salesman Dale Turton (left) use the computer which has become one of the most important tools at the dealership. (photo from 1983 article)

the Front Row | wsiada.com | September/October 2017 |

11

Mac Ruddell Scholarship 2016 Awardees

Olivia Delger

Shelby Randall

Aleah Redfield

Anna Yarbro

Olivia is attending for Gonzaga University and is studying Pre-Med. She was sponsored by Troy Delber of Automotive Distinction in Spokane.

Shelby is attending Eastern Washington University with an ultimate goal of pursuing a Doctorate in Physical Therapy.

She was sponsored

by Dave Randall of Randall’sw Auto Center in Kennewick.

Aaleah is studying Pre-Med at Colorado Christian University.

She was sponsored

by Michael Redfield of Auto Buyers in Kenmore.

Anna was sponsored

by Chuck Yarbro, Jr., of Chuck Yarbro Auctioneers in Moses Lake. Anna is enrolled in Big Bend Community College and her educational goal is to become a high school guidance counselor.

Victoria “Tori” Fletcher

Lourdes “Lulu” Vaca

RyAnn Warner

Tori is in the PreNursing program at Washington State University. She was sponsored by Blaine Fletcher of B & B Auto Sales in Puyallup.

Lulu is studying PreMed at Whitworth University with a goal of becoming a Neurosurgeon. She was sponsored by Alma Vaca of The Crazy Cow Dealership in Yakama.

2017 Awardees

Riley Bjazevich Riley is attending Brigham Young University to study Pre-Med with a focus on Communication Disorders. She was sponsored by Andrew Bjazevich of Grandstand Auto Sales in Kennewick.

12 | the Front Row | wsiada.com | September/October 2017

RyAnn is attending the University of Washington with the goal of becoming a Nurse Practitioner.

She was sponsored

by David Warner of Warner Auto Center in Kennewick.

WSIADA Education Fair

Some pictures from our very successful third annual education fair Thursday, August 17 at Lemay, America’s Car Museum. This event followed a very successful second annual Eastern Fair in Spokane with our co-sponsors, Credit Acceptance Corporation and DAA Northwest. Look for follow up articles in the next edition of the Front Row.

Scholarship Eligibility To apply for a Mac Ruddell Scholarship, applicants must meet the following requirements: ❏❏ Be a son, daughter or grandchild of WSIADA Member in good standing; ❏❏ Be a high school senior or college freshman; ❏❏ Have an excellent high school record of academic achievement measured by your performance in valid secondary school courses including English, Mathematics, Physical Science and Social Sciences; ❏❏ Demonstrate an aptitude for college work which will be measured by performance on college entrance exams, including the Scholastic Aptitude Test (SAT) if taken; and; ❏❏ Demonstrate involvement in extra curricular activities such as athletics, art, community service.

Application forms are available to download at: wsiada.com/wsiada -mac-ruddell-scholarship Submission Deadline: April 1, 2018

LuLu Vaca was present at the Western Education Fair at LeMay Car Museum in Tacoma with her parents, Ramon and Alma Vaca, to receive her Mac Ruddell Scholarship award. the Front Row | wsiada.com | September/October 2017 |

13

REGULATORY COMPLIANCE

Safeguards Rule:

Privacy and Security Compliance Checklist EDITOR’S NOTE: This is one of several articles bringing information privacy and dealer responsibilities into clearer focus. We published a Safeguards Rule article several years ago, but I thought it was important to stress the need for each dealership to have a specific privacy program starting with a privacy policy and including a plan, or response to catastrophic issues like data breaches.

WSIADA has a quantity of Data Breach Response pamphlets on hand in addition to the link provided to the online version of this issue of the Front Row. Several of our Associate Members have services and programs that can help your dealerships either refine existing programs or build new ones. Consult our Service Provider Director, or call WSIADA for more information. ~ Todd Elliot

PROGRAM COORDINATOR’S AUDIT OF DEALERSHIP PRIVACY POLICIES AND INFORMATION SECURITY STANDARDS CHECKLIST Exerpted from COMPLIANCE WITH THE FEDERAL TRADE COMMISSION’S SAFEGUARDS RULE, pp.9-11.

Employee Management & Training ❏❏ Are current employees, new hires and independent contractors who perform services on behalf of the Dealership subject to satisfactory reference—and where appropriate, consumer or criminal report investigations? ❏❏ Have you developed processes that limit access to customer information and other confidential records to authorized employees? ❏❏ Do you have a written document outlining the policies and procedures for handling confidential information? ❏❏ Have you considered having employees formally acknowledge their understanding of information security policies and practices? ❏❏ What steps has the Dealership taken to train employees on its privacy policies and information security standards? ❏❏ Does the Dealership employ password-protection software and encryption programs as appropriate and have employees been advised not to post passwords near their computers or share passwords with any other person? ❏❏ Do you have appropriate disciplinary policies?

❏❏ When an employee ceases to be employed by the Dealership, do you delete outdated user names and passwords from electronic databases and networks and obtain all keys to the Dealership and file cabinets, desks, and offices in the Dealership from the employee? ❏❏ Have you contacted your Dealer Association, Legal Professionals or other consultants to assist you with compliance as necessary?

Obtaining Customer Information and Verifying Customer Identities ❏❏ Do your forms request adequate customer information to verify the identity of the Dealership’s customers? ❏❏ Do employees request to see the customer’s driver’s license or other form of government-issued identification with a photograph to verify the customer’s identity? ❏❏ What policies does the Dealership have in place to address situations when customer information is conflicting or cannot be verified? ❏❏ Do you have procedures for ensuring that the Dealership does not enter into transactions with individuals or entities that appear on the list of Specially Designated Nationals and Blocked Persons maintained by the Office of Foreign Asset Control (OFAC)?

14 | the Front Row | wsiada.com | September/October 2017

❏❏ Do you have record retention policies for files that contain customer information and identity verification?

Information Systems ❏❏ How do you secure records? ❏❏ Are records that contain customer information stored where they can be locked when unattended? ❏❏ Are file cabinets, desk drawers and offices locked securely? ❏❏ Are storage areas secure from unauthorized access and protected against physical hazards like fire or floods? ❏❏ What is the process for collecting and filing written records? ❏❏ Are your electronic records stored securely? ❏❏ Do the passwords you assign contain enough characters and consist of both letters and numbers? ❏❏ Is on-screen information protected? ❏❏ Do you change passwords periodically and require employees to keep them private? ❏❏ How do you transmit and receive sensitive customer information? ❏❏ What measures are taken when disposing of customer information? ❏❏ Do you shred documents containing customer information and store it in a secure area until an authorized disposal/recycling service picks it up?

❏❏ How do you ensure data is eliminated when disposing of computers, disks, hard drives or any other electronic media that contains customer information?

Now Available at WSIADA.com

❏❏ Is there a need for a designated records retention manager? ❏❏ Is it necessary to establish retention periods for written customer files? ❏❏ Are employees prohibited from taking customer information out of the Dealership? ❏❏ How do you make sure your anti-virus and firewall software is up-to-date? ❏❏ Do you have a system for backing up information on computers and/ or servers? ❏❏

Are employees instructed to log off of all Internet, E-mail and other accounts when they are not being used?

❏❏ Who is responsible for downloading software or applications to the Dealership’s computers? ❏❏ Have you taken steps to prevent and prepare for a systems failure?

Selection and Oversight of Service Providers ❏❏ Have you established criteria for evaluating, selecting and auditing service providers? ❏❏ Does the Dealership have contractual agreements with all of its service providers? ❏❏ Are service providers required to agree to be responsible for securing and maintaining the confidentiality of customer information? ❏❏ Is the Dealership advised when a security breach occurs and does the Dealership have policies of advising it’s service providers of security breaches?

Managing System Failures ❏❏ Do you have a system for auditing and overseeing the Dealership’s privacy policies and information security standards? ❏❏ Does the Dealership take immediate corrective action when a security breach?

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wsiada.com/safeguardsrule

855-396-0488 the Front Row | wsiada.com | September/October 2017 |

15

SAFEGUARDING CUSTOMER INFORMATION

Safeguards Rule:

Key text from the actual law EDITOR’S NOTE: This rule is either the most misunderstood, or most ignored law in the long list of dos and don’ts for dealers. The Authorities are starting to take notice, so you would be wise to understand the rule and its implications on your dealership. I have highlighted several sections that are particularly important to take note of. This issue of the Front Row kicks off a series of articles and presentations designed to raise the compliance rate of Independent Washington Dealers. Watch for more in coming issues. ~ Todd Elliot §314.1 Purpose and scope. (a) Purpose. This part, which implements sections 501 and 505(b)(2) of the Gramm-LeachBliley Act, sets forth standards for developing, implementing, and maintaining reasonable administrative, technical, and physical safeguards to protect the security, confidentiality, and integrity of customer information. (b) Scope. This part applies to the handling of customer information by all financial institutions over which the Federal Trade Commission (“FTC” or “Commission”) has jurisdiction.

This part refers to such entities as “you.” This part applies to all customer information in your possession, regardless of whether such information pertains to individuals with whom you have a customer relationship, or pertains to the customers of other financial institutions that have provided such information to you.

§314.2 Definitions. (a) In general. Except as modified by this part or unless the context otherwise requires, the terms used in this part have the same meaning as set forth in the Commission’s rule governing the Privacy of Consumer Financial Information, 16 CFR part 313. (b) Customer information means any record containing nonpublic personal information as defined in 16 CFR 313.3(n), about a customer of a financial institution, whether

in paper, electronic, or other form, that is handled or maintained by or on behalf of you or your affiliates.

(2) Protect against any anticipated threats or hazards to the security or integrity of such information; and

(3) Protect against unauthorized (c) Information security program means access to or use of such information the administrative, technical, or that could result in substantial harm physical safeguards you use to or inconvenience to any customer. access, collect, distribute, process, protect, store, use, transmit, dispose §314.4 Elements. of, or otherwise handle customer information.

In order to develop, implement, and maintain your information security (d) Service provider means any person program, you shall: or entity that receives, maintains, processes, or otherwise is permitted access to customer information through its provision of services directly to a financial institution that is subject to this part.

§314.3 Standards for safeguarding customer information. (a) Information security program.

You shall develop, implement, and maintain a comprehensive information security program that is written in one or more readily accessible parts and contains administrative, technical, and physical safeguards that are appropriate to your size and complexity, the nature and scope of your activities, and the sensitivity of any customer information at issue.

Such safeguards shall include the elements set forth in §314.4 and shall be reasonably designed to achieve the objectives of this part, as set forth in paragraph (b) of this section. (b) Objectives. The objectives of section 501(b) of the Act, and of this part, are to: (1) Insure the security and confidentiality of customer information;

16 | the Front Row | wsiada.com | September/October 2017

(a) Designate an employee or employees to coordinate your information security program. (b) Identify reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of customer information that could result in the unauthorized disclosure, misuse, alteration, destruction or other compromise of such information, and assess the sufficiency of any safeguards in place to control these risks. At a minimum, such a risk assessment should include consideration of risks in each relevant area of your operations, including: (1) Employee training and management; (2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) Detecting, preventing and responding to attacks, intrusions, or other systems failures.

(c) Design and implement information safeguards to control the risks you identify through risk assessment, and regularly test or otherwise monitor the effectiveness of the safeguards’ key controls, systems, and procedures.

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(d) Oversee service providers, by: (1) Taking reasonable steps to select and retain service providers that are capable of maintaining appropriate safeguards for the customer information at issue; and (2) Requiring your service providers by contract to implement and maintain such safeguards. (e) Evaluate and adjust your information security program in light of the results of the testing and monitoring required by paragraph (c) of this section; any material changes to your operations or business arrangements; or any other circumstances that you know or have reason to know may have a material impact on your information security program.

SOURCE: U.S. Government Publishing Office -- ecfr.gov

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the Front Row | wsiada.com | September/October 2017 |

17

Service Provider Directory

WSIADA service providers are best in class. We invite you to explore their services and please mention that you saw their listing in the Front Row magazine.

Accounting Services

Car Care

Rekdal Hopkins Howard

Griot’s Garage

(425) 658-1400 rh2cpas.com

(253) 922-2200 griotsgarage.com

Please see our ad on page 22

Auctions

Commercial Insurance and Bonds

Adesa Seattle

Hecht & Hecht Insurance

(253) 735-1600 adesa.com/Seattle

(800) 609-0979 hechtins.com

Please see our ad on page 9

Adesa Portland

Shepard & Shepard Business Solutions

(503) 492-9200 adesa.com/Portland

(855) 396-0488 shepquote.com

Copart Auto Auction (253) 847-8300 copart.com

DAA Northwest (509) 244-4500 daanw.com Please see our ad on the inside front cover

DAA Seattle (253) 737-2200 daaseattle.com

Ehli Auctions (253) 572-0990 ehliauctions.com

Kaman Auctions (425) 640-5111 kamanauctions.com

Manheim Portland (503) 286-3000 manheim.com

Manheim Seattle (206) 762-1600 manheim.com Please see our ad on the inside back cover.

Benefits/Health Insur.

Benefit Consultants NW (800) 945-4193 bcnw.com.com

Please see our ad on page 15

Dealer Management Systems Skywerks (206) 999-6699 skywerks.com Please see our ad on page 20

Carousel Software Dennis Demattia demattia@mailforce.net (509) 926-8848 carouselsw.com

Frazer Computing, Inc. (888) 963-5369 frazer.com info@frazer.com

The F&I Group, LLC

Lobel Financial Corp.

(360) 710-9545 thefandigroup.com

(253) 839-2600

Northwest Dealer Financial Services

Please see our ad on page 2

(206) 718-7234 (Western WA)

(253) 887-5500

(509) 705-7597 (Eastern WA)

unitedfinance.com

United Finance Co.

nwdfs.com

Southwest Dealer Services

Marketing

(206) 571-3068

Sygnifi Networks

ian.fee@swds.net

(734) 418-7073 info@sygnifi.com sygnifi.com

SouthWest RE (877) 881-2244 southwestre.com

Western Fidelity Insured Services, Inc. (425) 283-4158 wfisinc.com

Floor Plan Companies Floor Plan Xpress (509) 703-6558 fpxus.com

Identity Theft & Data Breach Protection

Museum LeMay Car Museum (253) 779-8490 AmericasCarMuseum.org Please see our ad on page 19

Parts & Service AutoZone (866) 727-5317 sc53@autozone.com Please see our ad on the back cover

Signage

Dealer Direct of America

Sign Dog

Robin May

Finance and Insurance

(253) 653-9911

(253) 445-6424 signdog.com

AUL Corp

Legal Services

Surveillance/Security

Davies Pearson, P.C.

Pro-Vigil Surveillance

(253) 620-1500

(210) 858-1105 pro-vigil.com

(800) 826-3207 aulcorp.com Please see our ad on page 4

Benchmark Dealer Services dpearson.com (206) 696-2264 dpccorp.net Please see our ad on page 17

Coastal Financial Linda Jensen (360) 908-0612

Drive Dealer Solutions (425) 478-7242 drivedealersolutions.com

LegalShield 253 905-9111 legalshield.com

Lending Credit Acceptance (253) 279-3260 creditacceptance.com Please see our ad on page 8

18

lobelfinancial.com

| the Front Row | wsiada.com | September/October 2017

Vehicle Tracking & Fleet Management Spireon (800) 557-1449 spireon.com

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19

20 | the Front Row | wsiada.com | September/October 2017

READ AND RESPOND | the Front Row SEPT|OCT 2017

T

he purpose of this Read and Respond quiz is to verify one has read the content of this issue of the Front Row. All of the answers for the questions provided are included in the content of the issue. WSIADA’s Read and Respond quizzes earn 1 hour of continuing education credit. A passing grade will be granted for scores of 80% or higher.

Payment is required prior to the Washington State Department of Licensing being notified of completed continuing education. The Front Row Read & Respond policy has been updated; please contact WSIADA for payment information.

Please be advised that the information contained in WSIADA’s the Front Row is, to the best of our knowledge, current and correct. However, we caution readers not to use the information provided to them as final authority. Its purpose is to be a guide. Any legal advice should be regarded as general information. It is strongly recommended that one contact an attorney for counsel regarding specific circumstances. Some articles may express opinions and/or suggestions for best practices. Likewise, the appearance of advertisers or their identification as members of WSIADA, does not constitute an endorsement of the products or services featured.

DEALERSHIP NAME CHECK:

DEALER#

BUSINESS PHONE

FAX

I HAVE READ AND UNDERSTAND THE DISCLAIMER ABOVE.

QUIZ TAKER’S NAME

POSITION

EMAIL Send your completed quiz to WSIADA...

SIGNATURE

CIRCLE THE CORRECT ANSWER. 1. On May 5, 2016 the CFPB announced it was proposing a rule that would prohibit certain entities from using mandatory pre-dispute arbitration agreements that contain a class-action waiver. a. True b. False 2. Arbitration has proven to be a ____, less ____ and more effective means of resolving consumer disputes than classaction lawsuits. a. Slower, complicated b. Slower, expensive c. Faster, complicated d. Faster, expensive 3. The typical arbitration proceeding can take can conclude in a matter of years, but class-action litigation only takes months to work its way through court dockets.

DATE

4. The CFPB’s analysis revealed that consumers averaged more than $____ in recovery through arbitration as opposed to less than $____ in classaction litigation. a. $1000, $50

MAIL:

707 Auburn Way South; Auburn, WA 98002

FAX:

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EMAIL:

staff@wsiada.com

8. The CFPB’s rule was finalized on July 10th, 2017 and the rule takes affect September 18th 2017 and will apply to agreements entered into beginning ____. a. March 19th, 2018

b. $5000, $33

b. January 1st, 2018

c. $3500, $100

c. December 31st, 2017

d. $2000, $75

d. February 16th, 2018

5. Who are the big winners in a class-action lawsuits?

9. Mac Ruddell was the WSIADA Board President from 1978 to 1980.

a. The consumer

a. True

b. The CFPB

b. False

c. The Lawyers d. Nobody 6. The CFPB’s proposed rule will ____ the cost of consumer goods.

10. In 2004 a ____ program was created in honor of Mac Ruddell. a. Volunteer

a. Increase

b. Scholarship

b. Decrease

c. Membership

7. The CFPB’s proposed rule will force business owners to bear the cost of defending class actions, whether meritorious or not.

d. Charity 11. Any high school senior is eligible for the Mac Ruddell Scholarship.

a. True

a. True

a. True

b. False

b. False

b. False the Front Row | wsiada.com | September/October 2017 |

21

READ AND RESPOND | continued 12. The Program Coordinator’s Audit of Dealership Privacy Polices and Information Security Standards Checklist includes: a. Employee management and training b. Obtaining customer information and verifying customer identities c. Information systems

or other form, that is handled or maintained by or on behalf of you or your affiliates. a. True b. False 15. A service provider means any person or entity that ____ customer information through its provision of services directly to a financial institution.

d. Selection and oversight of service providers

a. Receives

e. Managing system failures

c. Processes

f.

All of the above

13. Several of WSIADA’s Associate Members have services and programs that can help your dealerships either refine existing programs or build new ones. a. True b. False 14. Customer information means any record containing nonpublic personal information as defined in 16 CFR 313.3, about a customer of a financial institution, whether in paper, electronic,

b. Maintains d. Is otherwise permitted to access e. All of the above 16. In order to develop, implement and maintain your information security program, you (the dealer) shall: 1. Designate an employee or employees to run the program 2. Conduct a risk assessment of your security processes 3. Regularly test or monitor the effectiveness of your program 4. Evaluate and adjust your security program based on test results

22 | the Front Row | wsiada.com | September/October 2017

17. Which of the following are objectives of the Safeguards Rule, or “Standards for Safeguarding Customer Information”? a. Insure the security and confidentially of customer information b. Protect against any anticipated threats or hazards to the security or integrity of such information c. Protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to a customer d. All of the above 18. Every independent automobile dealership must develop, implement and maintain a comprehensive information security program that is written in one or more readily accessible parts. a. True b. False

Washington State Independent Auto Dealers Association

Membership Enrollment

YES!

It is important to be to be recognized as a professional!

Enclosed are my annual dues to ensure that my business has all the advantages WSIADA/ NIADA provides to put me at the forefront of my profession.

By completing this form, I am consenting to and giving WSIADA/NIADA, its affiliates and subsidiaries, my permission to (until I give written notice to discontinue) contact me and provide information to me at the mailing and e-mailing addresses, telephone and fax numbers I have provided.

I hereby certify that (I am/we are) eligible for membership in WSIADA.

SIGN Member Name Business Name

Dealer #

Address City

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Enrolled by ________

Membership Category: $450 Dealer Member: [a] limited to any sole proprietorship, partnership or corporation which is engaged in buying and selling motor vehicles as a principal part of its business; and [b] must hold a vehicle dealer’s license issued by the Washington State Department of Licensing.

Business Name

Dealer #

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Dealer #

Business Name

Dealer #

Other Employees I would like to include within my membership: Full Name

Position

Mobile

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Full Name

Position

Mobile

Email

Full Name

Position

Mobile

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SEAL DUES PAID

$

VISA

MC

AMEXcheck

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CHECK No.___________

CCV

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DELIVER

WSIADA FAX EMAIL(as a scanned attachment)

707 Auburn Way South 253-804-0844 staff@wsiada.com

Auburn, WA 98002

the Front Row | wsiada.com | September/October 2017 |

23

JUST FOR FUN

Call for Good Humor!

Send us industry jokes, cartoons and funny photos for possible inclusion in future Front Row editions!

Email them to: staff@wsiada.com 24 | the Front Row | wsiada.com | September/October 2017

the Front Row | wsiada.com | September/October 2017 |

iii

WASHINGTON STATE INDEPENDENT AUTO DEALERS ASSOCIATION 707 Auburn Way South Auburn, WA 98002 WSIADA.COM

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