Shannon Robertson on Building a Compliance-First Dealership

Dealership compliance takes center stage in this episode of Inside Automotive featuring Shannon Robertson, Executive Director of Automotive Finance & Insurance Professionals (AFIP) and host of Compliance That Works. Robertson outlines practical strategies dealers can implement to reduce regulatory risk, strengthen operations, and build a culture of accountability.

As digital retail and social media marketing expand, compliance oversight must evolve. Robertson explains why proactive monitoring, consistent training, and clearly documented policies are essential to preventing costly fines and enforcement actions. She also discusses how dealerships can significantly mitigate penalties by maintaining an active compliance program—even when individual employees make mistakes.

Key discussion points include:

• How active compliance programs can reduce fines by up to 96%
• The importance of ongoing employee training amid high industry turnover
• Managing digital advertising, disclosures, and social media risk
• Assigning a dedicated compliance officer and enforcing top-down accountability
• Integrating compliance into daily operations to protect profitability and trust

Inside Automotive with Jim Fitzpatrick is powered by CBT News, your go-to source for the latest news, trends, and insights in retail automotive. Subscribe for more interviews with top industry leaders, dealership innovators, and experts shaping the future of automotive.

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Transcript

Why Compliance Now Matters

Jim Fitzpatrick 0:07

Welcome to Inside Automotive with Jim Fitzpatrick. Hey everyone, Jim Fitzpatrick. Welcome into another edition of Inside Automotive right here at CBTnews.com. Compliance is one of those topics dealers know they should pay attention to, but often don't think about it until it becomes a real problem. And by then it can be very costly for dealers. I know you know what I'm talking about out there. We've all seen the stories on CBT News and Automotive News and others. So we don't want to be a victim to some of the things that we see. So joining me now is Shannon Robertson, the executive director of AFib and uh the host of CBT's newest show, Compliance That Works. So Shannon, thank you so much for joining me on the show today. Thank you for having me. I appreciate it. Sure. This was the one area that uh dealers said, hey, you you know, you've got it on, you've got shows about finance, you've got shows about service, you got shows about sales training. You should probably have a show about compliance because this is an area that dealers are now, you know, really focused on for a number of different reasons, which we're gonna get into today. But um tell our audience a little bit about the show and uh that you got the the the new show logo right there, compliance that works with Shannon Robertson. Tell us a little bit about what you want the show to do for dealers.

SPEAKER_00 1:19

Absolutely. So um, you know, through training with AFIP, uh we do a lot of compliance officer training. We train compliance officers, how to be the compliance officers. And in those discussions, we found that there was this position at a dealership that was focused on customer satisfaction, holding employees accountable, satisfied customers that actually help drive results in productivity, PVR, drop-in chargebacks. And we found these people within these organizations that all found an area to make it unique to their stores to be successful. So we wanted to highlight those experiences, share those stories on how you can take, and I'll be candid with you, kind of a boring topic, right, and turn it into something very interactive that drives results and protects the dealer. That's great.

Introducing Compliance That Works

Jim Fitzpatrick 2:09

That's great. That's just what we're looking for. That's just what the audience uh and our dealers are looking for, comp trollers out there that are most concerned about this. As we all know, there's some renegade employees out there that are writing checks in a very big way for the dealers that they work for. And what I mean by that is when they're not compliant on something, and then they are either sued for it, or the state comes in, or the feds come in, or you know, it it's just not a pretty picture. You could lose lenders that way, you lose customers, they are upset, you you've got your uh contracts in transit, you know, through the roof, and uh and so it's a real issue. And especially moving forward, especially as we go into more digital deals, you know, where you know that this is an area that that is kind of new to a lot of dealers. We've only been doing them now for maybe the last four or five years since COVID, but we're doing a lot more of them. So uh so it so it's it's something that dealers really need to focus on.

SPEAKER_00 2:59

It is and there's a bit and I think there's a big gap there, right? We talk about dealers going from trying to do things right to being fined, sued, losing lending relationships. And there's a lot of steps that are skipped or missed that a dealer might not be doing that leads to that very dramatic end result. Right. So what compliance does is it puts policies, procedures, and practices in place to not allow that to get from here to here. Right. Right? You know, dealers that don't have compliance, don't track the process, right, they end up getting to that very extreme result quickly because there's nothing in the way to stop it. Right. That's what compliance does, is it keeps you from getting to that point. That's right. Um, I think the statistic, you know, there's a the federal sentencing guidelines have a statement that says even if an employee acts contrary to a dealer's policies and procedures, a dealer is still liable for their actions. Yeah. However, that fine can be mitigated by anywhere up to 96% if a dealer can show an actual compliance ethics in action working program. Right. That's what we want people to learn through this show is how to be able to reduce that fine if it happens and how do we protect.

Culture, Accountability, And Turnover

Jim Fitzpatrick 4:14

That's right. That's right. And it's so vitally important to have not nothing. And by the way, you know, the the employees of a company will know that there's no real focus on compliance. They might be the first ones to realize that, hey, nobody's really teaching us, nobody's training. It doesn't seem to be one of the key values of this dealer group, uh, because they never bring it up, they don't talk about it, there's no training, nobody's really held to it. We're just kind of supposed to know what we're supposed to know in this area, which can be very, very gray. But when you've got dealer groups to say, no, we've got a compliance officer, we've got the training, we open up these discussions, those employees that are gonna, you know, maybe leave the reservation, you know what I mean, and and just start to do some things that you don't want them to do, they're not gonna find a happy employment there.

SPEAKER_00 4:56

They're not. Right. And they and they're gonna get worked out quickly. Right. If as you as you know, as we interview these compliance officers and as you go through and you listen to the shows, one of the recurring themes you're gonna find is the top-down approach on dealership culture and ethics. That's right. And how they hold each other accountable and don't allow those things. Yeah. You know, you give examples of rogue employees. Some of these employees get worked out because the other employees don't allow that because they know the implication of those actions.

Jim Fitzpatrick 5:25

That's right. That's right. Because we have such a turnover in this industry, very, very high. Still, um, there's a lot of people that come in and go, I'm not gonna be here in three years. I'm not gonna be here in two years, I'm not gonna be here in six months. So whether or not I did this finance contract, I'm an FI manager, or I'm a sales manager, a salesperson, whatever the case might be, and yeah, I know it's a little, you know, it's not the right thing to do, but I don't really care. You know what I mean? You get a lot of that in this industry, unfortunately, right? Agreed. So let's switch gears a little bit. Talk to me about some of the things here we are in 2026, uh the first quarter. What are you telling your dealers today to focus on? What are some of the trends in in the area of compliance that dealers need to be aware of and know about? It's a good question.

The Shift To State Enforcement

SPEAKER_00 6:03

So the the pendulum of compliance swings, it doesn't sit in the middle. Right. Right? So, you know, in previous administration, we saw very aggressive uh federal enforcement action. The FTC, the CFPB was very aggressive, not just dealers, lending companies across the board. Um in the current administration, we're seeing that pendulum go from federal to state. Right? Um we've seen a pretty dramatic reduction in force at the CFPB, whether they have employees or not, it's a whole different conversation. Right. So as we've seen a reduction of force with CFP, CFPB employees, we're seeing them hired at the state level. Okay. So we've taken employees under previous administration that were aggressive in their enforcement action, and we've transitioned them to the state level. So what we're seeing under the current administration and even the last quarter and the this quarter is we're seeing the states become more aggressive with automotive dealers on some very specific topics. Okay. So from a dealer perspective, compliance isn't going away. We have to be aware of what your state's focus is. Okay. Okay. What what key areas are they cracking down on? It's pretty specific. We have advertising, addendums are the two areas of focus. Okay. And when I mean advertising, I mean online advertising prices. Okay. Do they match on-site? Are the dealers properly disclosing additional fees that might be included or making the statement not included are these? Right. Right? Those are the two areas that we've heard from several dealers on in quite a few states that they've received letters from their from the state uh state attorney generals that there's an inconsistency in the advertised price, online price. Right. The second area is addendums. There's been a lot of focus on addendums. Okay. Right? Are the addendums properly disclosed? Are they accurately priced, right? Or fairly priced or justifiably priced. There's a couple different ways we can put that. We saw that with the etch years ago. Absolutely. It's coming back again. Um and in some states you have to disclose those addendum prices online. Um if you're including a um a fixed, sorry, if you're including an item that is not that is that is optional, are you disclosing it that it's optional? Our advice you don't put optional products on an addendum because there's a lot of different things different items you now have to disclose. Sure. And some states don't even allow it. But if you are, are you providing those proper disclosures?

Ads And Addendums Under Scrutiny

Jim Fitzpatrick 8:28

And also uh uh in in the area of uh dock fees, um in many states they say if you're gonna advertise a price, it has to include that dock fee, right? That's correct. No dealers. This is an area that always gets dealers in trouble. Does it not?

SPEAKER_00 8:42

We we could have a doc fee's a cost, we could do an entire segment on dock fees. Um some states have very restrictive dock fees, it's a set price. Other states say the dock fee cannot exceed a reasonable amount. That's a loose interpretation.

Jim Fitzpatrick 8:55

Exactly.

SPEAKER_00 8:56

Um but there are states that clearly say that if you if you are gonna charge the dock fee, you have to include it in the advertised price. That's a joke.

Jim Fitzpatrick 9:05

Um because if you go to any, any anywhere, I mean because it takes right away, especially in states uh whether it be uh we're here in Atlanta, so in Georgia, whether it be Florida, Florida's like the Wild West in terms of dock fees, they're charging$1,500,$1,800 for a dock fee. Not all dealers, those so don't write me any emails, but there's some crazy numbers out there so that they can advertise a new Toyota for a grand back of invoice and still make$800, you know. But you know that that dock fee is not in that price on website.

SPEAKER_00 9:34

And it is if it's not, then they if it's not, now this varies based on state law, then they at least have to disclose and not include it. Right. So even if you're not in a state that doesn't require it, you have to disclose what's not included and you have to put it where a customer can see it. What of one of our dealers that got a letter from the government on the disclosure, they they were told at the bottom of the website, at the very bottom, you had the disclosure not included. Not near the price. Correct. Nowhere close to the price. Not included were addendum of this price and dock fees, tactile license, all that stuff. And the state was very clear, you have to put it where the customer can see it. Sure. It should be by the price.

Jim Fitzpatrick 10:18

Well, it's like advertising a uh an 84-month payment and then putting, you know, putting down at the bottom how many months it's for. Absolutely. Right.

SPEAKER_00 10:27

It it it's and it's deceptive. The government sees it as a deceptive act.

Jim Fitzpatrick 10:30

Right.

Doc Fees And Clear Disclosures

SPEAKER_00 10:31

And if we if we get out of the government world, I mean, how many complaints do we see online, social media, Google, where customers will say, I went to go buy a car from a store. I just read two today. I went to go buy a car from a dealer, and when I got there, they tried to hit me with all these additional fees. Yep. Right? And it's not that they're trying to hit them with additional fees, they didn't properly disclose those fees online. That's right. That's right. Right. And literally almost every day as I scroll through social media, somebody sends, I either see one, somebody sends me a snapshot of one, right? That's where that comes into play. The other area is there are federal and state advertising requirements. There are triggering terms, there are required terms, right? They the state is looking at not just online, your dealer's social media page. Right. Right? So those advertising rules apply to those social media pages.

Jim Fitzpatrick 11:26

Which I'm not sure a lot of people realize that. They think, well, social media, I just put out there that we can we can sell tundras for, you know,$6.49 a month. Come on in. As soon as you put that number in there, a payment, it requires all the other federal disclosure, uh, disclosure, the truth in lending and everything. Just because it's on Facebook doesn't mean you're not advertising it. And it doesn't, and it just comes down to training.

SPEAKER_00 11:48

Yeah. I mean, yeah, exactly. Let's be clear, a lot of dealer principals are not social media savvy. They hire somebody or they take a younger generation person in the BDC department and say it hasn't had compliance training. There you go. And says, handle social media, let's bring business in. And there are good posts out there. But if you're gonna get into those numbers, you have to follow those advertising rules at federal and state level. And if we even want to drill down to the next level, employees posting on their personal page on behalf of the dealer also have to follow those same guidelines. So now you have to have training for the employees that use social media. Wow.

Jim Fitzpatrick 12:27

That that and by the way, that's becoming uh just a kind of a a uh, you know, uh uh industry in and of itself. You've got trainers out there, we've interviewed a number of them on here that are working with dealer groups to say, hey, you've got 10 salespeople, make those 10, you know, social media, you know, uh uh experts out there and marketing experts, so that we've got all these different channels. But to your point, they could be writing a big, huge fine check for you because they they don't know what they're not supposed to be doing, right? That's correct.

Social Media Traps And Training

SPEAKER_00 12:55

Yeah, the guiding rule we give for employees, don't get into numbers. Okay. Right? What drives people on social media to your store? Yeah, normally people are emotional buyers, they become attachment. Right. Right? So I think the most effective tool we've learned is those that just do videos. Yeah. Right? If I'm a sales manager, finance manager, and I want to bring people into my store, when the manufacturer shows up with those new trucks, yeah, do a Facebook Live. Show them the cars. That's right. Right? Uh, you know, we had a friend of ours that works at a dealership, he took in a new Z06 as a trade-in. Yeah. Uh and I said, post the video online, don't put any numbers, and just start the car. Yeah. Somebody's gonna hear it, that's right. Somebody's gonna reach out. That's right. That's where you drive those results. You don't even have to really get into the numbers from an individual standpoint. Sure.

Jim Fitzpatrick 13:42

I just saw um uh somebody was on um live, uh, I think it was TikTok live or what have you, and and the dealer, uh the guy came on and said, Hey, it's the last couple of days of the month. Any vehicle that you bring in, any trade-in that you bring in is worth$3,500 to me. Okay, that's how bad we want to make deals. Okay, it's worth$3,500 if you bring that bring that vehicle in the next 48 hours. It's the last couple of days, and we want to make every deal that we can. Now you know what's gonna happen on that deal. Somebody's gonna walk in, work the best deal they can. The guy's gonna be sitting at a nothing deal and go, oh, by the way, I got my$3,500 trade with me. Okay? And that that sales manager is gonna be in some major hot water. Because it's gonna be well, no, you had to present that before you didn't say that in the video. Where is that in your video? Because I have a c I have, you know, I have you now on recorded. Yeah. You said any trade is worth$3,500. You didn't say I had to present it before dot negotiation. You didn't you didn't mention any of that. That deal is gonna pay$3,500 for that car.

SPEAKER_00 14:40

Oh, absolutely on a nothing deal. And every time, it's interesting you bring up these live sessions. There are some good accounts out there, yeah, and I I don't want to give the names. No, no, of course not. No, no, no. Where they they record themselves interacting with customers, interacting with salespeople. There are some great ones out there. Yeah. There are some I follow and I'm I I I feel like do great at what they do. Yeah. But there's also ones out there that don't understand the rules and regulations. They do what they were taught to do, right? That I think other dealers, I mean, I other people in the industry think they can do it because they watched it. That's right. So there's there's an interesting trend that you're bringing up on everybody going live. Oh, it's unbelievable. Right. And they're saying, well, I got this deal done because I did this. And what he did was a violation of the dealer agreement. Right. That's right. Nobody else knows that. If I'm a sales manager, finance manager in another dealership, I now think that I can do what some guy did at another dealership live. That's right. So the whole live conversation is a whole different conversation from a compliance. And it's recorded, it's on social media, it's not going away. That's exactly right.

Go Live Without Violations

Jim Fitzpatrick 15:42

And uh, and by the way, try to convince a jury, you know, of uh the fact that this is a legitimate deal because they're gonna go, no, no, no, no. I might have been a victim of this or no somebody that I know, so it's gonna be tough. Uh juries typically don't favor, you know, you know, auto dealers. And you want to avoid jury at all costs. That's exactly right. And that's what this show is gonna be about. It is it's it is what it's about. We've already launched a couple of segments already, so uh we're so happy to have you on board as part of our winning team here in the automotive space. And uh, this is exactly, folks, exactly what CBT News has been bringing you over the last 13 years, our subject matter experts uh in their field, and uh by providing great content, you know, free of charge. And uh, but this this is an area that we have been a little bit laxed on, and that's the compliance. And uh and now we've got you know Shannon Robertson on, executive director of AFib, and uh we're so happy to have you aboard. I mean, that I think it's gonna be great. I really do.

SPEAKER_00 16:36

I'm looking, I'm having fun, I'm looking forward to it, and hopefully, I'm really hoping people watch, listen, learn, and most importantly, apply the things that they hear. That's right, that's right.

Jim Fitzpatrick 16:46

At least at least look into them in their store to say, hey, Shannon just brought up five different great points here. Are we covered in this area? Are we doing this, you know? And uh, and then and then uh what do they say? In uh inspect what you expect. There you go. That's why dealers need to do that as well. Don't don't don't take the lip service from people that go, yeah, yeah, yeah, we're we're doing that. Nah, they're probably not doing that. But uh so Shannon, thank you so much. Thank you for sure.

SPEAKER_00 17:10

Thanks for watching Inside Automotive with Jim Fitzpatrick.