Automotive legal expert shares how to adapt collections compliance strategies for the real world

FORT WORTH, Texas, May 1, 2015 /PRNewswire-USNewswire/-- Most auto dealers and lenders are well aware of big-picture compliance safeguards they should implement into their collections efforts. But actually doing them is another story.

"Compliance goals – whether they are for collections or another area of the business – often sound simple. Where dealers and lenders falter is getting caught up in operational needs and ultimately dropping the ball on legal obligations," said Steve Levine, Chief Legal Officer of AutoStar Solutions and a keynote speaker at Innovate 2015: The Independent Dealer Industry Conference, Sept. 20-23, in Fort Worth, Texas.

"If you want to stay out of the crosshairs of attorneys and regulators, collections compliance is not just an option. There are certain imperatives you absolutely must follow. But it can be simple, I promise," Levine said.

Today, he outlined three pieces of big-picture advice often heard in auto collections circles, along with details for making these objectives a reality:

1) VAGUE ADVICE
Develop a policy and procedure manual just for collections.

WHAT IT MEANS IN REAL LIFE
This document must set forth both operational expectations and the overall legal emphasis that each employee is responsible to know and follow the law.

"Don't make it too complicated. The manual should be short, sweet and to the point. A smaller document is easier for employees to understand and follow," Levine said. "Plus, in the event of litigation, it won't be so cumbersome as to trip up employees."

Levine calls the policy and procedure manual your "Get Out of Jail Cheaper, If Not Free" card in the event of a legal challenge. "You will be able to demonstrate that your stated company goal was to strictly follow the law, and that any deviation from that objective was an unintentional mistake," Levine said. "Thus, the problem can be limited to the failings of one employee rather than indicate a widespread company issue."

2) VAGUE ADVICE
Train your employees.

WHAT IT MEANS IN REAL LIFE
"In my experience, this is the area where companies most often fall short," Levine said. "You can have the best policy and procedure manual in the world, but it won't do you one bit of good if it's sitting in someone's desk and has never been rolled out to the collections floor."

Levine recommends implementing a written training calendar to serve as a record of when every collector receives training. "A collector should go no more than a few months without some form of training and reinforcement," Levine said.

Since a lot of training happens one-on-one on the collections floor, Levine said collections managers and supervisors must follow up and make a note in the collector's file to show training was received. If possible, the collector should initial or sign the page, as well. "If it isn't written down, it didn't happen," Levine added. "The plaintiff's lawyers will always make that argument."

Levine said one of his larger clients built their training into a monthly performance review meeting, which prioritized the issue in the minds of employees. In another case, a small car lot with only a few collectors called attention to training by hosting a monthly brown bag lunch in which a pertinent training topic was presented.

3) VAGUE ADVICE
Regularly audit collection letters.

WHAT IT MEANS IN REAL LIFE
This audit process must encompass all communications used to collect debt, including text and email. The audit should uncover any "document creep," or cases where more than one letter is used to accomplish the same thing. "Not only is this wasteful and inefficient, but it creates risk if the letter content is incorrect," Levine said.

Just like the training calendar idea, companies should track every written communication, when it was last reviewed, and by whom. Also assess whether the letters take into account and complement your call strategy and billing practices.

An attorney or compliance professional should review any Article 9 letters, which concern repossession and its aftermath. "There is nothing worse than losing twice, first when the customer doesn't pay – and then again when you must pay that customer damages due to a statutory violation," Levine said. "Proactive, regular reviews will avoid adding insult to injury."

To get more in-depth, real-world knowledge on collections compliance, join Levine and the most-respected legal experts in the country at Innovate: The Independent Dealer Industry Conference, Sept. 20-23 in Fort Worth, Texas. The show will feature more than 80 different classes – all 1 ½ hours long – that dive deep into compliance, collections, finance, accounting, operations and more.

Innovate is the only show for independent dealers and lenders with two full compliance tracks, which by themselves cover 16-20 different topics. In total, attendees will access more than $10,000 in legal insight for the price of admission.

AutoStar expects over 600 attendees at this year's conference, including major exhibitors and financial institutions that will showcase the latest dealership technology, best practices and industry solutions.

To view the full schedule or buy tickets, visit www.myinnovate2015.com. Attendees registered before May 31 will receive $100 off.

About AutoStar Solutions
For more than 20 years, AutoStar Solutions has provided dealer management software solutions to independent automotive dealers and subprime finance companies in the United States. Their web-based software helps clients automate and simplify activities, while maximizing compliance with state and federal regulations. Learn more at www.autostarsolutions.com.

SOURCE AutoStar Solutions

Related Links

http://www.autostarsolutions.com