Website Compliance for Dealerships

By: Danielle Roth

 

As most dealers would agree, dealer websites have become the center of online commerce and digital retailing. Websites do much more than show inventory – they also capture leads, process financing pre-qualifications, and offer chat-based support. Interactions with consumers generates valuable behavior data which enables the website to be used as a real-time customer profiling engine. While this may be good news for sales, it can also pose serious privacy and compliance challenges. 

 

Certain data that is collected on the website such as credit information, chat interactions, and browsing behavior is often sensitive and personally identifiable. When this information is shared with third-parties (such as an OEM) without informed consent, the dealership can risk lawsuits or regulatory action against them. Certain tools like “cookies” and “pixels” operate silently in the background and often without the consumer’s knowledge. Many dealers, OEMs, and other third-party vendors want the collected information and these tools are embedded deep in the dealer’s website and frequently without proper consent mechanisms. 

 

As a result of these tools being used without proper consent, dealers have been facing more legal issues nationwide. Certain attorneys are bringing forward State private and class action lawsuits, Federal private lawsuits, State privacy lawsuits, Federal Unfair and Deceptive Acts and Practices (“UDAP”) Enforcement lawsuits, and State UDAP Enforcement lawsuits. These attorneys are using claims such as federal wiretapping violations by alleging that third-party cookies are used to track consumer activities and share information without consumer consent. Though these type of consumer lawsuits were once mainly seen in the State of California, they are now prevalent nationwide. Additionally, there has been an uptick in the number of class action lawsuits nationwide. 

 

So what can a dealer do to keep from being liable in the event of a consumer lawsuit? First, every dealer should implement a “compliant banner” which prevents marketing cookies and tracking pixels from loading until after a consumer clicks “accept.” Additionally, dealers should disclose any website tools that collect and share information. Lastly, dealers should work with chat module providers to include conspicuous disclosures that notify consumers that sensitive information sent in the module may be shared with third parties. Putting these compliance measures in place may enable some consumers to “opt out” of  data being collected, and dealers may get some push-back from OEMs and third-party vendors. However, it is important to remember that at the end of the day it is the dealer who will be left with the legal exposure if these policies are not implemented. 

 

Another important website compliance mechanism that dealers should adhere to is advertising the total price (including all mandatory fees) that consumers will be required to pay. Dealers cannot advertise low prices and then add on mandatory fees at the end of the purchasing process. Recently, the Federal Trade Commission (“FTC”) sent out letters to 97 auto groups nationwide, warning them about misleading advertised prices. The letters the FTC sent to the dealers cite several examples of illegal pricing practices in the auto industry including:

 

• Advertising a price that does not reflect all required fees;
• Advertising a price that reflects rebates or discounts not available to all consumers;
• Advertising a price that fails to take into account the amount of an additional required down payment;
• Conditioning the advertised price on consumers using dealer financing;
• Requiring consumers to buy additional items not reflected in the advertised price; and
• Advertising unavailable or non-existent vehicles.

 

To avoid fines from the FTC, it is important that dealers review their advertising and pricing

practices, including ensuring advertised prices on their website include all fees consumers will be required to pay when buying a vehicle. At a minimum, this includes evaluating advertised prices to ensure they match actual prices charged to consumers.