August 20, 2026
By Barrie Charapp Beaty
Charapp & Weiss, LLP
bbeaty@cwattorneys.com
Dealers constantly face the challenge of managing and training employees to work steadily and uniformly to reach the dealership’s goals. Employees may resist mandated training, but ignoring the need for such consistent efforts, especially on compliance, can be costly.
How often are you training your personnel? It may be policy that employees may be trained only every 6 months, which may or may not be enough. Looking at your processes, your personnel training may not be enough. For example, you may want to train new hires within the first month of hire so they know what is expected of them. You may want to train every month or every other month on certain subjects so that the personnel are not overwhelmed with various topics in one training. Nevertheless, training by example by management should occur on a daily basis. If bad habits and behavior are recognized, the corrections should occur immediately.
F&I Compliance: Training your personnel is key to keeping you F&I compliant.
- Forgeries: Forgeries are a cardinal sin against consumers. Dealership personnel should be trained on forgeries. Personnel shall not be signing anything on behalf of the consumer, even if its checking a box that states the document is electronically signed. The consumer shall be signing, checking and attesting to all documents. If the F&I personnel is sending documents that are not signed by the consumer (including electronically signed) to banking institutions, this could be considered wire fraud under federal law. The consumer is the only person that should be signing, checking or attesting to his or her signature whether its electronic and/or original.
- No False Representations. If you are selling a product such as a maintenance plan, make sure the representations are accurate. Do not represent to the consumer that they will be paying less per service if they purchase the maintenance plan at the time of sale instead of paying for the maintenances individually. There should be no misrepresentations as to the products being offered or the benefits that they provide.
- Train Personnel on the Products they are Offering. Sales and F&I personnel should know the products they are selling. They should not just be following a script. They should take the time to educate themselves on the products and the terms for the programs. Not knowing the products often leads to the misrepresentations. The products being offered should offer value to the consumer. If the consumer is paying cash, the personnel should not be selling a GAP warranty.
- F&I Compliance Program. An F&I compliance program that constantly trains employees must be adhered to. Use the NADA policy on voluntary protection products to establish uniformity in offering prices on the voluntary protection products to all consumers. Use the NADA’s policy for fair lending so that establish uniformity in credit rates offered to customers.
- Use a Menu. Make sure you have menus with the VPPs and the pricing. Make sure the disclosures of the products and pricing are on the menu. For best practices, the buyer should sign a copy of the menu indicating the chosen and declined products should be kept in the deal file. And importantly, make sure the prices on your menu match the prices on the customer’s purchase contract.
- Cash Reporting. Your personnel knows that cash over $10,000 needs to be reported, but often lack of training gives way for the nuances to the rule to slip by. If you are paid in thousands of dollars of cash and have to return the amount paid, the returned monies should be in the same tender as provided (i.e., cash for cash, check for check). If you are returning thousands of dollars in cash, write down the bill numbers, take pictures of the monies returned, and provide the person with a receipt. If you know the money tendered is not from legal earnings (i.e., the person paying in cash is your brother-in-law’s dealer), don’t do the deal and don’t take the money. If you have 3 transactions in a row where the same person paid with a check for $8,000, then $5,000, and then $8,000, it is a reportable transaction. Train your personnel on the nuances of cash reporting.
- Use a Deal Checklist for the Deal File Documents. The F&I department needs to ensure that all documents required in the deal file are actually in the deal file. Often the F&I personnel and the comptroller are at odds because F&I wants the deal booked so that they are paid on the deal, but the comptroller can’t book the deal if documents are missing. Train the F&I personnel on the documents that are needed. Use a deal checklist so that they have everything needed in the deal file. We provide a sample checklist in this newsletter.
We provide a checklist for Sales and F&I Compliance in this newsletter for overall compliance. If you notice a problem occurring, fix it immediately. Your personnel need to know the compliance program and need to constantly be trained to avoid costly lawsuits (and government investigations).
Discrimination and Harassment Training:
The company should regularly train employees about the company’s policies prohibiting discrimination and harassment.
Employees should be trained on:
- The Policy: Employees need training on the company’s policy against discrimination and harassment, and its importance of these policies to the dealership.
- Procedures to Report the behavior: The need for employees to report behavior that they feel violates the policies and procedures. Nothing can be done for an employee until the matter is reported. The report should preferably be to the employee’s supervisor. If the employee feels uncomfortable, then means to report the behavior to senior management should be provided. Preferably the dealer should provide a number for a hotline or a line directly to the dealer so that there is no mistake about the importance of reporting these matters.
Employee training is critical. Under law established by the United States Supreme Court, an employee’s failure to report wrongful behavior can give the employer a defense to a legal action, but only if the dealership can show that the employee knew of the policy against discrimination and harassment, knew of the importance of complaining, and knew to whom a complaint should be reported.
Managers should be trained on:
- The Importance of Action: Managers must understand that if they observe a problem or a complaint comes to their attention, they must immediately take action. All complaints of discrimination and harassment are important and must be properly handled.
- Method of Response: Managers must be trained in the proper actions to take if they see a problem or if they learn of a problem. A manager must not brush off the alleged wrongful behavior. However, the manager must understand the importance of remaining neutral and not overreacting. “We know that Joe has a tendency to touch young women,” is never the appropriate response to a complaint about Joe. A manager must never jump to conclusions. A manager must remain neutral in the face of behavior that appears to be inappropriate, whether the manager sees it personally or receives a report of improper behavior.
- Investigation: The manager must be taught how to investigate in the event of a charge of wrongful activity. There are specific steps in conducting an investigation and managers must know how to effectively investigate alleged violations of company policy.
- Resolution: Managers must understand that there must be a resolution to any investigation. Whether there is a decision that nothing improper occurred, or a decision that the offending employee must be terminated, there must be a conclusion. And the person who claimed to have been the subject of the wrongful behavior must be made aware of that resolution.
In summary, training needs to routinely occur. Written policies and procedures are a great start, but they irrelevant if they are not constantly trained on and enforced. Training is expensive and time consuming, but so are the lawsuits that occur due to a lack of training and adherence to the policies in your dealership.