Is Your Website Leading the Regulators to Your Door?

[Ken Rishel]

Most community operators and most retailers now have, and depend on websites to drive traffic to their leasing and sales operations. No matter how an operator feels about them, websites are necessary when dealing with the public. It is also true, the better the website, the better the response, and there are a plethora of web site gurus out there offering services to those who need them. While there are truly amazing resources available, none of them seem to be really equipped to handle the nuances behind the content without the help and involvement of the community or retailer themselves.

This is especially true when dealing with the laws and the rules promulgated by the various state and federal agencies. Website gurus don’t usually know these rules and the advice offered by some is just plain bad. It is the owner’s job to know what can and cannot be said, and insist on it being done correctly.

It is an absolute and indisputable fact that the FTC and the CFPB, as well as a number of state regulators, have discovered how cheap and easy it is to wander through websites looking for easy prey. They have done it, they are continuing to do it, and from their perspective, it makes perfect sense. They need only spend a few hours time of a lower paid employee to discover a retailer or community owner whose website declares, “Financing Available” to open a case that may earn them thousands, if not hundreds of thousands, of dollars worth of fines. It is a no brainer for them, and that is why they are doing it.

When they knock on the door using the advertising violations as their entree, their main meal could easily be compliance violations tied to retailing or seller finance. They can also go back years looking for violations if they chose to do so, so the fines and penalties can mount up to staggering amounts.

Over the last six years as this newsletter has preached the need for compliance, one of the most frequent questions has been, “How are they going to find me?”. This is normally followed by, “I’m just a small operator so I am too hard to find”. Perhaps the quickest answer to that question is - through your website.

The regulators do not have to be in Rolla, Missouri to view your website. A website can be viewed from anywhere in the world where there is internet access. Certain undocumented folk, using a translation page have found the communities they want to live in from an internet cafe in Central America, so certainly the regulators can find a retailer or community making advertising claims about financing they are prohibited by law from making.

From a regulator’s perspective, the entity that is willing to violate the rules on advertising financing, is likely willing to violate or ignore other rules as well. To them that simply means an easy victory over the entity and a quick goldmine in fines and penalties. So, why would any community operator or retailer paint a target on their back?

Reasons for Not Doing What Should be Done on Websites

Uneducated to the Law and Rules that are in Place.

Mistaken Belief that No One Can or Will Watch Them.

Fear that Sales will Drop if Financing is not Advertised.

Underestimating the Importance of Allocating the Time and Money necessary to Fix the Problem.

These are the most common reasons, but certainly there are others. What is known is that the regulators are already moving through the internet and making a list and checking it twice for later action. When Santa does that the worst a kid can expect is coal, but retailers and community owners can expect much worse.

This article is being reprinted from the April 2014 The Finance Newsletter and was authored by employees of The Rishel Group, a national consultancy on chattel finance and seller finance. It is being reprinted with the express written permission of The Rishel Group