June 23, 2025
By Barrie Charapp Beaty
Charapp & Weiss, LLP
bbeaty@cwattorneys.com
Many of our newsletters have covered various compliance topics. How well do you understand compliance at your stores?
This quiz tests your knowledge on the status of some critical compliance issues for your dealership. The answers are available via attachment at the bottom of this quiz.
Sales Practices:
1. Arbitration agreements are regularly challenged by plaintiffs' attorneys. But there are substantial benefits to arbitration – reduced time in a decision, removal of the possibility of a runaway jury, limited discovery, to name a few. We can still use arbitration agreements for transactions with customers and for employees. True or False?
2. We stopped using the NADA Fair Lending program when the Trump administration entered office in January 2025. We still train our sales and F&I employees that finance rates should be provided to customers on a non-discriminatory basis. Our fair lending training should protect us from lawsuits. True or False?
3. We spot delivered a vehicle to a difficult customer for whom we cannot find a finance source to approve assignment of the RISC. The customer is finally agreeing to return the vehicle. Because of the extra work we had to do, we wish to keep the downpayment. We may do so if we can justify our expenses. True or False?
4. We spot delivered a car, and we cannot find a finance source to accept the RISC. We also cannot find the customer or the car to repossess it despite diligent efforts to locate them. We can report the vehicle as stolen. True or False?
Advertising:
5. When we advertise an attractive APR, we must disclose any qualifiers such as the limit on the duration of the financing, and we must disclose the amount or percentage of the downpayment and the terms of the repayment. True or False?
6. Under the Truth in Lending Act, if we advertise a low APR, we must also disclose the amount or percentage of the downpayment, and the terms of repayment. True or False?
7. We have some especially low lease rates. Even though those are like the annual percentage rate, we cannot advertise those as low APR leases. True or False?
Employment Practices:
8. An employee handbook is dangerous because it lets employees know what their rights are and viewed as an employment agreement. True or False?
9. We want to run credit bureau reports on employment candidates to make sure they don't have credit problems. Our employment application contains an authorization to run a credit report on an employment applicant, but we cannot do so based simply on the signature on an employment application. True or False?
10. Choose the Correct Answer: What should be covered in a salesperson's pay plan?
a. The length of the saleperson's employment
b. The specific definition of vehicle cost
c. All pay calculations are final
d. None of the above
e. All of the above
11. An employee filed a claim of harassment. We didn't violate federal law by harassing the employee in the first place, so we can't be found liable for taking action against the employee for filing a complaint. True or False?
12. Salespeople are paid on commission. They don't have to punch the time clock. True or False?
Other General Compliance:
13. Our dealership is located in Virginia and has Maryland customers. One of our salespeople called a Maryland customer to discuss a vehicle they purchased. We don't use the "quality assurance" recording on outbound calls and our employee did not tell the customer that the call was being recorded. We have now been sued by that customer and want to use the voice recording from that call as part of our defense in the lawsuit. There is no issue that using that call because our employee knew the phone call was being recorded and gave consent. True or False?
14. We are compliant with the FTC Privacy Rule so we are compliant with the FTC Safeguards Rule. True or False?