Dealers are coming up with different ways to protect against misconduct in their finance and insurance offices.

The industry has come a long way cleaning up F&I abuses that can range from fudging figures to outright criminal acts.

One of the more common transgressions is making a big score at the expense of an unsuspecting customer.

John Elway Toyota in Ontario, CA, is on guard against that.

“We've decreased the number of items sold in the F&I office, gone to menu selling and changed pay plans to discourage that type of behavior,” Gil Perez, the dealership's general manager, says at the Consumer Bankers Assn. auto finance conference in San Francisco.

Dealership F&I operations have come under increasing scrutiny by government regulators and law enforcement officials.

It has made dealer principals sensitive to what goes on in the F&I offices, Perez says. “In the past, things were done that shouldn't have been done.”

F&I staffers at Honda World and Downey Acura in Downey, CA, are financially rewarded for their ability to sell a lot of products at reasonable prices rather than a few products at unreasonable prices, says operating partner Jeff Hodge.

“Our pay plan focuses more on penetration than gross profits,” he says.

F&I managers who overcharge beyond set prices get hit where it hurts — the wallet — at Lithia Motors Inc.'s chain of dealerships.

“If an F&I manager overcharges a customer, we charge him,” says Bruce Goetsch, Lithia's finance director. “If he overcharges $500, we charge him $500.

“If one of his friends comes in and he undercharges him $500, that's $500 that comes out of his commission,” says Goetsch.

He says Lithia follows a now-standard industry practice of telling customers what a car costs and what its monthly payments will be without F&I add-ons.

Before, a widespread practice was to quietly hike monthly payments past the price of the vehicle, then use the extra money to cover F&I products.