FTC red flag rules for car dealers

History

Red Flag Rules is the compulsory program required of a vehicle dealer when they offer, extend, or arrange credit for a vehicle buyer. AutoBrokers handling non-public information are also required to be compliant. The purpose of a written red flag rules program is to establish adherence to all state & federal regulations in the offer of credit to vehicle owners and prevent identity theft.

President Obama enacted this legislation at the federal level in 2011.

The program is administered by the FTC.

FTC Red Flag Rules Guidelines

 

Regulations

Administration is handled by the California Department of Motor Vehicles (DMV). It is the responsibility of the automobile dealership owners to appont a RFCO, red flag compliance officer and that RFCO then creates and administers a written ITPP, Identity Theft Prevention Program.

Since 1998 TriStar Motors LLC has been the leader in compulsory DMV car dealer education.

Since 2001 TriStar Motors LLC has offered car dealer continuing education.

Since 2008 TriStar Motors LLC has offered car dealer red flags certification.

TriStar Motors Red Flag Rules Compliance Program

TriStar Red Flag Rules Online Tutorial

 

RFCO ( Red Flag Compliance Officer ) Regulations

When a dealership offers or extends credit the dealership must have a written ITPP in place and it must have an RFCO, appointed by the dealer ownership to administer, train, update and keep the dealership program current and up to date.

There are four types of credit the dealership might offer:

Bank Credit

Credit Union Credit

Third Party Lender Credit

Buy Here Pay Here Credit

AutoBrokers by the nature of their business collect and retain non-public information. AutoBrokers must adhere to the same regulations.

The RFCO must update the red flag program on a quarterly basis.