Manage Social Media Risk at Your Dealership

While social media is an attractive advertising forum, dealers must exercise caution and make sure that  . . .

Guest Blogger Steve Levine, Attorney with Ignite Consulting Partners

While social media is an attractive advertising forum, dealers must exercise caution and make sure that personnel understand social media posts are advertising, rules need to be followed, and failure to do so can have bad consequences for both the individual and the dealership.
The most frequent social media violation we see is Sales personnel posting vehicles for sale on their personal Facebook pages.  They wrongly assume that since the ad isn't on the dealership page, they don't need the “trigger term” Truth-In-Lending Disclosures.  As a refresher, if down-payment amount, APR, payment amount or term is mentioned, then each of them need to be included. If the dealership owns the vehicle, the regulator won't buy the argument that it's not a dealer ad.  Especially if the vehicle's picture is taken at the dealer's location with signage visible, as was the case in a recent matter we reviewed.
Another bad habit that's become prevalent is sales folks “posing” as individuals when offering a vehicle for sale.  They may use Craig's List or a similar site to entice the consumer into believing this is a consumer to consumer transaction, and only bring up the dealership when it's time to discuss financing.  Of course, the contract then names the dealership.  To make matters worse, these sales may happen off premises, giving rise to an argument of using an unlicensed location to conduct sales, which puts the dealership in jeopardy. 
Finally, we see a lot of ads that are incomplete and therefore deceptive because they don't advise the consumer of all the relevant charges and fees, the result being the final financial terms are very different from what was originally proposed.  Please keep in mind that regulators can scan social media without ever leaving their office, so don't make their job easy.
We strongly recommend that every dealership have a social media policy that explains to their personnel the rules and limitations and then provide training.  Have each person sign a page acknowledging both the policy and training.  By doing this, the dealership can demonstrate that it has taken steps to be compliant and that a violation by an individual is a mistake and not representative of the company's business practices. 


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