Tag: F&I Compliance

Adverse Action Notices: F&I Compliance Tip

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An “adverse action” is, basically, a refusal to grant credit, the termination of an account, or the changing of an account’s terms in a manner unfavorable to the consumer — such as unwinding a spot delivery contract.

Why it Matters

As creditors, dealers are required to give adverse action notices to consumers in three situations:

  1. When a dealer takes a credit application but does not send it to any financing source, typically because the consumer is credit-challenged.
  2. When a dealer unwinds or re-contracts a spot delivery deal.
  3. When the dealer is unable to get the customer financed on terms acceptable to the dealer, or because the customer declines the dealer’s final offer of credit after concluding negotiations.

Auto dealers are viewed as creditors because they are involved in negotiating the credit terms, and are typically named as the creditor on the retail installment sale contract (RISC) – which is later sold to a financial institution. A lender’s adverse action notice does not contain the necessary disclosures that must be given by the dealer. That includes, but is not limited to, naming the credit bureaus used by the dealer and the federal agency that administers compliance.

How it Works

An adverse action notice must do the following:

  1. Inform the consumer of the adverse action either with two to four reasons, or by notifying the consumer who to call at the dealership within 60 days to get the reasons.
  2. Identify any consumer reporting agency that provided a credit report or credit score.
  3. Provide the consumer’s credit score, information about the credit score, and up to four to five “key factors” that adversely affect the credit score (four key factors unless one is the number of recent credit inquiries).

The notice must contain other mandatory language as well. To view a sample notice and get more detail about adverse action notices and more compliance advice, download the free 2025 Dealertrack Compliance Guide.

Learn more about Dealertrack Compliance and register for a demo to find out if you’re meeting Adverse Action notice requirements today.

 

May the 4th (and Force) Be With You: Four Ways Auto Retail is Kind of Like Star Wars

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There may not be light sabers involved (one hopes), but when it comes to Star Wars and the technology that drives auto retail, we can make a few fun comparables.

After all, the last thing any sales manager or dealership controller wants is to get stuck on a virtual outpost, searching for solutions like a desert scavenger. The sunset might be nice, but that outpost is no place to find cutting-edge workflow technology. So in the spirit of the day, and the pursuit of connected retail, here are four ways auto retail technology is (kind of) like Star Wars:

1. Jumping to light speed is like using Accelerated Title.

When it comes to title release, Accelerated Title gets you from start to finish 70 percent faster than the industry standard* — a time that’s sure to be quicker than any old Imperial TIE fighter. It’s technology that streamlines payoff quoting, release, and even tracking and reporting.

2. Using the force is like integrating F&I Compliance into your workflow.

It’s so much a part of process that you barely notice it’s there…until you need it. Then it becomes a powerful way to protect and defend your dealership from ID fraud, potential audits, and more.

3. Droids are a symbol of advanced technology – with a smart human touch.

The concept is like our Menu Selling solution: technology that helps build engagement and improve the aftermarket experience. F&I products like GAP, warranty and maintenance options are presented in a friendly and consultative way — thanks to the use of personal technology.

4. Sometimes, what you need is a simple, fast, and effective Podracer to get the job done.

More than that will slow things down, when the most important thing is a fast and efficient finish. Keep that in mind when it comes to your Reg & Title operation. Simple and powerful functionality such as an accurate calculation of taxes and fees, as well as automated error-checking, help ensure that this final step in the process meets the customer’s expectations.