Keeping Up with Compliance at Bergeron Auto

When the Gramm-Leach-Bliley (GLB) Act became an issue dealers were forced to contend with, Dealer Denis Bergeron was eager to take the steps necessary to protect his customers and their identities at Bergeron Chrysler Dodge Jeep Volvo in Metairie, La.

GLB went into effect in 2001, and Bergeron recognized the significance of it. He said, “That was the first act that was going to put auto dealers in the same category as banks where we would have to protect people’s personal identities … I understood what the government was trying to do [with GLB] … It got my attention.” As a second-generation dealer, he knew the ins-and-outs of the dealership, but wanted some outside help with more legal expertise to help the dealership comply.

So, the first order of business was to find a third party to work with the dealership and help ensure compliance. “I needed a professional organization to help me … [and] monitor what we’re doing in the dealership.” Around 2003, he called upon Automotive Compliance Consultants (ACC), a consulting group focused on automotive-related compliance issues.

Bergeron said, “We did everything that ACC recommended we do. You’ve got to have a process. You have to have a [compliance] manual. If they trace an identity thief back to you … the FTC is the governing body that will come in and say, ‘OK, let me see your [compliance manual].’ You’ve got to have what your processes and procedures are to protect [customers’] identities on file.”

Part of protecting their customers’ identities is keeping important information under lock and key. “Every office that houses deal packets has a lock-down mechanism on the door, and you have to have a [code] number to get in that office,” he said.

He said he simply runs his business based on how he’d want to be treated if he were the customer. “I don’t want my identity ever stolen,” he said, adding, “My employees are very aware and cognizant of identity theft and other compliance issues. We’re consumers too; we want people to protect our identities too when we’re out there conducting business as consumers. We certainly have that same responsibility at Bergeron.”

Bergeron Auto relies on the help of ACC to maintain compliance in other areas as well. Dealers must contend with several other rules and regulations that emerged before the GLB Act came out (Regulation M, Regulation Z, Truth in Lending, etc.), and there are the more recent issues that have come after GLB to contend with, like the Red Flags Rule, OFAC verification requirements, etc.

Compliance in general isn’t difficult; the initial push to get compliant is the difficult part. Once a dealership has all the necessary procedures integrated into its day-to-day operations, compliance is fairly easy and becomes part of the dealership’s culture. “It’s not a full-time job. Once you set the processes in place … it’s not something you have to work on every day,” said Bergeron. Other than periodic reviews and occasional training, the dealership’s compliance is able to run virtually on auto-pilot. He said, “If we need to set up a little seminar with some of our employees to reiterate some things or cover compliance issues, we’ll do that.”

Bergeron also has a retired attorney on staff – Vaughn Brennan – who helps monitor the dealership’s compliance efforts and works closely with the dealership’s consultant from ACC, Ed Waggaman. In 2005, Brennan, began working at the dealership in sales. After he’d retired as an attorney, he saw an ad for a training program for car sales and thought selling cars would be a “fun profession.” After finishing the two-week training program, he was placed at Bergeron Auto. Brennan recalled, “I actually sold cars for about 90 days, and then Denis Bergeron … found that I could do other things. And that was the end of my selling cars.”

As a retired attorney, he was a natural fit to aid the dealership’s compliance efforts, and the first task he took on after his brief sales career was compliance-related, “dealing with the different avenues of protecting other people’s personal information.” He said, “We have the issue of privacy, training and keeping up with requirements under a variety of jurisdictions.”  

In addition to aiding the store’s legal compliance issues, Brennan also helps to make sure the dealership complies with manufacturer requirements like proper branding of the store and planning quarterly customer-care clinics for new owners. Additionally, he does some training of the sales and F&I staffs and peruses industry, local and national publications to stay abreast of changes in the industry—both compliance-related and non-compliance-related. He’ll share any worthy articles with Bergeron, and he creates an interoffice newsletter to share pertinent information with the employees.

Another one of his duties is coordinating with ACC to audit the dealership for compliance. “They will pull 10, 20, 30 deal jackets and see whether or not the compliance factors have been met. Then, they will review that with me. I, in turn, review it with our different personnel,” said Brennan. He added that the dealership typically fares very well through the audit process. Also as a part of their service, ACC provided the dealership with compliance manuals. “We have them here, and they review those as well and make sure they’re updated.”

In addition to all his compliance-related and training duties, he has a host of others, which certainly keeps him busy, but even at 78, he’s more than able to keep up. “Denis [Bergeron] has told me I don’t need to do as much as I do, but I have felt … if I don’t do it, it’s not going to get done. Let’s put it this way, I’m not overwhelmed.” In fact, he’s looking to take on yet another task—help the workflow in service. Over the past year, both the service and sales departments have seen increases in business, and in service, Brennan wants to determine how he can help the department keep up with the influx of customers.

Bergeron recounted, “We were probably averaging 30 to 35 [new] Chrysler Jeep [sales] in 2009 … In 2010, we were probably averaging 80 … We’re on a 130 [new] car pace this month [August 2011].” He added that an increase in sales typically results in an increase in service business. He’s in the process of adding both sales and service staff to help meet demand.

Brennan added to that, “Right now, we are leading in the state of Louisiana in the sale of new [Chrysler] vehicles … and we’re in the top three percentile of all dealers in America.”

While business at Bergeron Auto is booming, Bergeron recognizes that the F&I office is a vital aspect of the operation, and fully intends to keep up with compliance. “F&I is an integral part of our business. All roads lead to Rome, and Rome is F&I.”

Vol. 8, Issue 10