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New Law Offers Opportunities
A new federal law safeguarding consumer data offers dealers an excellent opportunity to review certain parts of their operations as well as gain customer trust, say veteran dealer CPA and analyst Jacob J. Cohen. The law taking effect this year is the Gramm-Leach-Bliley Act. It sets up a variety of legal requirements relating to consumer financing. It should be viewed, not only as a federal legal compliance
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A new federal law safeguarding consumer data offers dealers “an excellent opportunity” to review certain parts of their operations as well as gain customer trust, say veteran dealer CPA and analyst Jacob J. Cohen.
The law taking effect this year is the Gramm-Leach-Bliley Act. It sets up a variety of legal requirements relating to consumer financing.
It should be viewed, not only as a federal legal compliance step but “a chance to maximize the efficiency in dealership operations,” says Cohen, based in Baltimore and part of the AutoCPA Group.
From a customer relations standpoint, “dealers can show their customers they are responsible in handling private information and maintaining good privacy policies,” says Cohen.
He recommends seven steps for implementing the so-called “safeguards rule” of the Gramm-Leach-Bliley Act. They are:
Appoint as a coordinator a staff member who is familiar with dealership systems and records archiving.
Include electronic files, transmissions, record disposal and system security with physical storage of customer credit data.
Train management and staff to participate in the safeguarding procedures.
Use vendors to help reduce the cost of implementing the plan, including those in data process, the telephone company and Internet and security services.
Don't risk a non-compliance complaint from regulators by neglecting the area of risk assessment when safeguarding measures are in place.
Coordinate a “disaster plan” that safeguards customer data in the event of earthquake, fire, etc.
Engage an outside firm to act as an independent audit and review resource to check on how the compliance operation is working.
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