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We recently did a document review for a dealer that is a good reminder of how important it is to make this a regular part of your compliance routine.
During the review we noticed that the last page of the retail installment contract had lines that read "Insurance Addendum attached" and "Agreement to Arbitrate Attached", with boxes that needed to be marked. The problem was in this instance those boxes were unmarked even though the buyer had in fact signed a separate Arbitration Agreement and Insurance Addendum.
Given the particular state the dealer is in, I don't think this is a fatal issue because both the Arbitration Agreement and Insurance Addendum were clearly signed by the buyer. That's not to say, though, that some zealous lawyer won't try to argue that the absence of the marked boxes created some form of confusion or deception.
Interestingly, though, a look back at last year's review shows those boxes were correctly marked, which raises the question of how they became unmarked. The dealer claims it must be the software company's doing, and the software company is pointing back at the dealer. They can argue about that all they like, but the Dealer is ultimately responsible for the accuracy of its paperwork.
The bottom line is to make an annual document review a part of your process so that you uncover issues like this before they come back to bite you.
Need assistance? We are here to help – contact us at info@ignitecp.com.
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