FAQ: What Should Dealers Do?

Often, a dealer will be presented with a problem that will require a quick decision. The right answer may mean the difference between the proper operation of the dealership and a lawsuit.

Here are some common situations that dealers face from time to time. See how your reactions compare with the law.

Q: The customer won't sign the privacy notice. What do I do?

A: The law requires delivery of the privacy notice. If the customer is in the showroom and won't sign, note that on the copy and give the original to the customer. If the customer will not take the original, note that in the file.

Spot check files to make sure privacy notices are being delivered. Most customers will sign a privacy notice and take it. If there are a large number of files with notations that the customer would not take it, you may have an employee who does not want to take the time to present it.

Q: The customer demands that we negotiate our privacy notice and make changes. What do I do?

A: The privacy notice must not be negotiated. It is not an agreement with the customer. It is a notice to the customer of the company's privacy policy, just like you personally receive regularly in the mail from your credit card companies and other creditors. If the customer won't sign the privacy notice, see the previous question.

Q: We sold a car, and the customer wants to bring it back. We told him we will not take it back. Now his lawyer is calling. What do I do?

A: Investigate the claim of wrongdoing and the facts of the deal. But first make sure the caller really is an attorney. It's easy for a customer to get a buddy to impersonate a lawyer.

Advise the caller that the company does not respond to attorneys without written verification of representation. Advise the caller to contact the dealership in writing on the attorney's letterhead specifically stating that the attorney represents the client.

Q: When we sell a used car with our warranty, we don't give the customer a separate document since the information is on the FTC buyer's guide. A customer is demanding a separate warranty document. What do I do?

A: Give the customer a separate warranty document as the federal Magnusson Moss warranty law requires. That law requires that a warranty document contain provisions that are not included on a FTC buyer's guide.

Q: A finance company called to say one of our customers defaulted on his finance contract. The company is demanding that we buy the contract back. What do I do?

A: From time to time, a finance source will make such a demand. When you ask why, the company will tell you that you breached a representation and warranty in the indirect finance master agreement that you signed when you set up the relationship.

Carefully review the demand for repurchase, the facts of the deal, and the indirect finance master agreement. If you do not believe that the demand for purchase of the paper is appropriate, challenge it.

Q: One of my employees claims I cannot tell him how to dress because it violates the civil rights laws. What do I do?

A: Your dealership is permitted by law to have, and your dealership should have, a policy setting employee dress and grooming standards. Courts generally view such policies as not subject to the same level of scrutiny as policies relating to gender, race, age, disability, and the like.

A carefully written policy can provide for reasonable differences between men and women. A policy can also provide for differences depending upon the employees' job classification and the level of interaction with customers. Your employees project your image to those with whom they deal. You want that image to be a positive one.

Michael Charapp is an attorney with Charapp & Weiss, LLP. He specializes in representing motor vehicle dealers and be reached at (703) 564-0220 or [email protected].