SUMMER 2024 Pub 64 | 2023-24 | Issue 4 OFFICIAL PUBLICATION OF THE TEXAS AUTOMOBILE DEALERS ASSOCIATION TADA LEGEND NYLE MAXWELL
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Contents © 2024 Texas Automobile Dealers Association (TADA) | The newsLINK Group LLC. All rights reserved. Dealers’ Choice is published four times each year by The newsLINK Group LLC for the TADA and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your specific circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the TADA, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. Dealers’ Choice is a collective work, and as such, some articles are submitted by authors who are independent of the TADA. While Texas Automobile Dealers encourages a first-print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at (855) 747-4003. Scan this code with your smart phone for a direct link to the TADA website. 10 Dealers’ Choice 12 6 PRESIDENT’S MESSAGE The Wheels Never Stop Turning BY DARREN WHITEHURST, PRESIDENT, TADA 10 Celebration Honors Naming of Tarleton State’s College of Business for Dr. Sam Pack 12 TADA Legend Nyle Maxwell 14 Cleared for a Smooth Landing Texas Economic Outlook 16 2024 TADA Leadership 20 Key Director Award Winner C.J. Barnett 22 TADA Annual Conference and Board Meeting in Photos 24 Disgruntled Employees How To Handle an Employee’s Refusal to Sign Workplace Policies or Warnings BY JIKKU JOHN, LEGAL COUNSEL TO COMMISSIONER JOE ESPARZA 26 How to Steal a Car with a Pen 30 NTXAD Fast Track Program 32 Dealer Service and Honors 32 Huffines Auto Dealerships Celebrates 100th Anniversary 34 Sterling McCall Hyundai Grand Opening 36 Lost Pines Toyota Welcomed at the Festival de La Cultura! 37 Monument Chevrolet in Pasadena, Texas, Celebrates 50 Years of Business! 38 Commemorating D-Day DEALERS’ CHOICE 4
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PRESIDENT’S MESSAGE THE WHEELS NEVER STOP TURNING By Darren Whitehurst, President, TADA TADA endeavors are similar to that of a three-legged stool. The association works on the legislative, legal and regulatory fronts on behalf of new car and heavy-duty truck dealers across the state. As the legal and regulatory areas are a direct result of activities in the legislative arena, we will start with the legislative process and the elections. Texas is one of only four states that have a biennial session. The next regular session will start in January 2025. Our regular sessions run in odd-numbered years for 140 calendar days. They start on the second Tuesday in January and run until around Memorial Day in the late spring. Much of this campaign season has focused on presidential politics and it is shaping up to be as divisive as it was four years ago, with four or five states positioned to determine the outcome. Texas is solidly Republican, and polling suggests that will not be changing anytime soon. All the major statewide offices are currently held by Republicans (Governor, Lieutenant Governor, Attorney General, Comptroller, etc.) and none of these are up for election until 2026. On the 30-year noteworthy front, Texas Democrats haven’t won a statewide election since 1994. Texas just finished its primary election runoffs last month, so there is a pretty good idea of the makeup for both the Texas Senate and Texas House. The Texas Senate is expected to operate in a similar fashion to how it has operated over the last several sessions with Gov. Patrick at the helm and a makeup of 19 Republicans and 12 Democrats with the one caveat below. There will be at least two new members in the chamber from open races — Molly Cook (D-Houston) and Brent Hagenbuch (R-Denton) each won their respective races. There is expected to be one competitive Senate race this fall in a district that runs from north of Corpus all the way to Brownsville. In the 150-member Texas House, the picture is murkier. While there are only a handful of General election races in November that could slightly modify the 86 Republican and 64 Democrats breakdown from last session, the primaries resulted in significant changes. The Republican primaries, in particular, were filled with lots of action and there were significant changes to the representation for a number of these districts. Nine incumbent House Republican members were defeated in March and another six lost in the May run-offs. These 15 losses, along with one on the Democratic side, set the record for the most House incumbents to lose re-election, ever. Coupled with the 16 other members who chose not to run for re-election, it signals what could be a very different Texas House next session with lots of fresh faces and new ideas. Although current House Speaker Dade Phelan (R-Beaumont) narrowly won his re-election in a Primary run-off, he now faces challenges from at least two Republican members of the House to serve as Speaker next session. All the turnover and Speaker-race contention will likely make the next Legislative session a challenging one for the business community, but your TADA team is already at work meeting the newly-elected members and briefing them on the issues most important to your business. Continued on page 8 DEALERS’ CHOICE 6
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The TADA Legislative Committee is preparing for the numerous challenges facing automotive dealers in the upcoming session, but we need your help to be successful in 2025. At the end of the day, all politics are local. Texas dealers have always enjoyed fantastic relationships with their local and statewide elected officials. With both the soon-to-be legislators and long-time elected officials, I want to encourage you to continue this effort. Reach out and be a resource for your local legislator. Host your legislators out at your dealership and show them the work that your employee family does to keep your business running and highlight your involvement in the community. Show legislators your service departments and talk to them about your employee training efforts and staff retention. It is so valuable to the elected officials and to our industry to have you host these meetings. If you need help making the contact, TADA is here to help. On the legal front, there is a lot of activity, one focused at the state level, the other involving the federal government. There is a direct challenge to the state’s franchise laws which currently prohibit direct sales by manufacturers. At the federal level, the FTC has proposed new rules to establish more requirements on the sale, financing and leasing of new and used vehicles by motor vehicle dealers. Both cases are slowly winding their way through the legal system and TADA will keep you up to date as more information becomes available. On the regulatory front, there are numerous activities taking place at the Texas DMV and the OCCC — too numerous to list here. I would like to reference a couple of the ones that have attracted recent attention. The first is the backlog in getting your dealer license renewed. Several bulletins have gone out highlighting the problem, and TADA would encourage you to submit your application early until the DMV is able to catch up on the backlog. The second is the elimination of the temporary tag and the requirement that dealers hard plate all vehicles in the future, which was passed by the Texas Legislature last session. The DMV is working hard on proposed rules which will be unveiled later this fall. Since the final rules aren’t scheduled to take effect until July 2025, there will be an opportunity next session to work on revisions to this new law. Finally, TADA’s efforts in all these areas would not be possible without the extraordinary work of our dealers. The franchise dealer system provides a robust network of vehicle sales and service outlets throughout our state that benefits Texas consumers and ensures the quality of life and safety on the highways for thirty million Texans. We know so many of you do so much good in your community every day. I want to thank you for your work and would ask that you share these endeavors and successes on your own social media and/or that you send them to TADA to share. I know you don’t do this for the credit, but it is important politically to be sure that our elected officials know just how deeply invested you are in your community. Each of you has done so much to make Texas a better place to be for future generations. Let’s continue to highlight these great achievements, both big and small! Continued from page 6 DEALERS’ CHOICE 8
Celebration Honors Naming of Tarleton State’s College of Business for Dr. Sam Pack Tarleton State University celebrated the naming of its College of Business in honor of esteemed supporter, honorary doctorate recipient and automotive industry legend Dr. Sam Pack on April 18. In north Texas, Dr. Pack owns Five Star Ford dealerships in Carrollton, North Richland Hills, Dallas and Lewisville, along with Five Star Chevrolet in Carrollton and Five Star Subaru in Grapevine. Additionally, he co-owns six luxury dealerships in Tulsa featuring Lexus, Audi, Volkswagen, Cadillac, Jaguar and Land Rover brands. His historic gift of over $10 million is the largest in Tarleton State history. “Tarleton has a very special place in our hearts,” said Dr. Pack. “As great as the university is, the best days are yet ahead, and our family wants to be a part of that. We want to make a difference in the lives of the young people, especially those that bleed purple.” The impact will be felt immediately. “What strikes me most about Sam is he puts others ahead of himself at every opportunity,” said Tarleton State President Dr. James Hurley. “The premise of his success has been based on relationships. He has that innate ability to make people feel valued, regardless of what their position is in a particular organization, association or entity. He values every single person and the importance of higher education.” Dr. Pack has been honored numerous times, highlighted by the national 1988 TIME Dealer of the Year tribute, the industry’s most prestigious award. In 2003, he received the Ford Motor Company Salute to Dealers Award, presented by Edsel Ford II, for his commitment to improving communities and the lives of individuals in them. He was also honored as a Texas Automobile Dealers Association Legend in 2006 and was named to Ford’s inaugural Top Volume Dealers Hall of Fame in 2016. “Over 40 years of service in the automotive industry, he has provided an education of his own to those around him,” said John Sharp, chancellor of the Texas A&M System. “His business acumen, giving nature and passion for others are special traits. Dr. Pack’s continued commitment to sharing his wealth of knowledge aligns with Tarleton State’s efforts to increase access and opportunity for all.” More than 3,100 undergraduate and graduate students are enrolled in the Dr. Sam Pack College of Business, with courses available at Tarleton State’s Stephenville, Fort Worth and Waco campuses, along with online. Dr. Pack’s impact will be felt for generations to come. DEALERS’ CHOICE 10
Students in the college work with Union Pacific, Walt Disney, Boot Barn, Saint-Gobain, Barefoot Campus Outfitter, L3Harris Technologies, Goldman Sachs, H-E-B and Amazon, among others, for internships and senior capstone projects to gain hands-on skills and knowledge. All programs within the college are fully accredited by the Association to Advance Collegiate Schools of Business (AACSB). Fewer than 6% of business schools worldwide are accredited by the AACSB, which is the premier business school accrediting body. “Dr. Pack’s impact will be felt for generations to come,” said Dr. Rajarshi Aroskar, Dean of the Dr. Sam Pack College of Business. At Tarleton State, he has already made his mark, supporting the food pantry, the President’s Circle, and the Dr. James and Kindall Hurley Scholarship Endowment. Additionally, the Tarleton State University Pack Automotive Group Intern Program provides Texans with learning opportunities that promote future career success. Last spring, he was presented with an honorary doctorate of humane letters from Tarleton State for his humanitarian and philanthropic contributions as well as a President’s Legacy Award for Excellence, Integrity and Respect at the Gala. Overall, he supports more than 300 nonprofits, service organizations and community events. “Dr. Pack has experienced success in all facets of life,” said State Rep. Shelby Slawson (District 59). “We will work tirelessly to ensure that the college named in his honor is the best of the best.” When discussing Dr. Pack’s life, State Sen. Brian Birdwell (District 22) focused on how his story will impact future generations. “As a self-made man, he will inspire Tarleton State students for years to come. His lifelong commitment to faith, family and the greater good is a tremendous example for others to follow.” In a journey filled with accomplishments and recognitions, Dr. Pack said that the university naming its College of Business in his honor is a distinction that stands above all. This is just the second time an academic college at Tarleton State has been named for an individual. “I’ve been honored in a lot of different ways, but it’s the greatest honor that has ever been bestowed upon me,” he said. “I will always be indebted to those who were instrumental in making this happen.” Learn more about the Dr. Sam Pack College of Business at www.tarleton.edu/cob. For additional information on Dr. Sam Pack, watch this video by scanning the QR code. https://www.youtube.com/watch?v=rjaE2zEdVXA. A founding member of The Texas A&M System, Tarleton State is breaking records — in enrollment, research, scholarship, athletics, philanthropy and engagement — while transforming the lives of nearly 17,000 students in Stephenville, Fort Worth, Waco, Bryan and online. True to Tarleton’s values of excellence, integrity and respect, academic programs emphasize real-world learning and address regional, state and national needs. 11 DEALERS’ CHOICE
Nyle Maxwell was the 22nd TADA member to be inducted into the TADA Hall of Legends. He was honored on April 14 at the TADA Annual Conference held at the Omni PGA Frisco. Only a handful of dealers out of the thousands who have served Texas over the past 100+ years have been selected as a TADA Legend award recipient. The award goes to the best of the best in this essential industry, and Nyle’s contribution to both the industry and to his community have certainly earned him this honor. TADA Legend Nyle Maxwell DEALERS’ CHOICE 12
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Senior Business Economist Laila Assanie, Federal Reserve Bank of Dallas, was the featured speaker at the April TADA Conference. Her presentation highlighted a positive economic outlook and solid job growth for Texas in 2024. Cleared for a Smooth Landing TEXAS ECONOMIC OUTLOOK To review the presentation in its entirety, scan the QR code. https://www.tada.org/common/ Uploaded%20files/Regional%20 Economic%20Update_4-15-24.pdf Cleared for a Smooth Landing Texas Economic Outlook Senior Business Economist April 15, 2024 Laila Assanie DISCLAIMER: The views expressed are the authors’ and do not necessarily reflect the views of the Federal Reserve Bank of Dallas or Federal Reserve System. 2 Overview Labor market remains robust Texas employment rose 2.6 percent in 2023, outpacing U.S. YTD job growth is strong Last year, labor force grew at its fastest pace in decades in part due to solid migration Economic activity is slowing but positive Manufacturing activity weak, modest growth in services Home sales increasing, but activity in commercial real estate remains sluggish Above-trend growth expected in 2024 Positive momentum present in early 2024 Retail spending remains strong Near term risks to the outlook are somewhat balanced DEALERS’ CHOICE 14
© 2024 Truist Financial Corporation, TRUIST, Truist purple and the Truist logo are service marks of Truist Financial Corporation. All rights reserved. Truist Securities is the trade name for the corporate and investment banking services of Truist Financial Corporation and its subsidiaries. Securities and strategic advisory services are provided by Truist Securities, Inc., member FINRA and SIPC. | Lending, financial risk management, and treasury and payment solutions are offered by Truist Bank. | Deposit products are offered by Truist Bank, Member FDIC. We’re more than a financial partner. We’re an invested one. True relationships matter. We don’t take this lightly. The best are built on a deep understanding of your short- and long-term goals and always backed by thoughtful, strategic advice in support of your vision. With full-service financial solutions and a deep bench of industry expertise, we’ll build a team around your organization to focus on your success. So, let’s drive further—together. To learn more, visit us at Truist.com/DealerServices.
Ryan Kirkpatrick Vice Chair District Directors 19 Carlos Liriano 21 Pat Schuchart 24 Joseph Shields 26 Mark Stevenson SOUTHWEST Fernando Varela Vice Chair District Directors 2 Tim Capps 3 Joe Loving 4 Robert Turner 7 Ashley Willson EAST W.C. Smith III Vice Chair District Directors 5 Jason Feldman 6 Kyle Janke 15 Enrique Lance 33 Tony Gullo Jr. SOUTHEAST Evelyn Sames Vice Chair District Directors 17 Melissa DeMontrond 18 Chris Wall 20 Jennifer Yoder 27 Natasha del Barrio SOUTH 2024 Executive Committee Charlie Gilchrist IMMEDIATE PAST CHAIR Tim Crenwelge CHAIR-ELECT Bryan Case Sr. CHAIR John Luciano Vice Chair District Directors 28 David Zwiacher 30 Patrick Sykora 31 Cory Dupriest NORTHWEST Stephen Gilchrist Vice Chair District Directors 10 Tony Pack 22 Will Churchill 23 Jose Pozos 34 Sherri Herring NORTH Jeff Rachor Vice Chair District Directors 1 C.J. Barnett 8 Scott Fly 9 Finley Ewing IV 35 Tobias Fulton NORTHEAST Greg Bruner Vice Chair District Directors 16 Kenny McCarty 25 Jimmy Bass 29 Bill Pollard Jr. 32 Drew Hoy WEST Paula Lohse Vice Chair District Directors 11 Julie Herrera 12 Mike Zorn 13 Mary Karr-Ellis 14 Scott Stark CENTRAL 2024 TADA Leadership DEALERS’ CHOICE 16
DIRECTORS AT-LARGE CAR DEALERS • Howie Bentley • Benny Boyd • Bently Durant • T. Harper • Mike Sullivan • Brandon Tomes TRUCK DEALERS • James Bennie Brian Bruckner TEXAS TRUCK DEALER CHAIRMAN Karen Phillips TADA GENERAL COUNSEL AND EXECUTIVE VICE PRESIDENT Darren Whitehurst TADA PRESIDENT METRO CHAIRS • Rick Wallace • James Bagan • Jason Gonzalez • Chris Gillman • Art Kiolbassa • Brent McGavock • Carl Sewell III 17 DEALERS’ CHOICE
Robert TURNER C.J. BARNETT Jason FELDMAN Kyle JANKE Ashley WILLSON Tim CAPPS Joe LOVING East, Dist. 4 East, Dist. 3 East, Dist. 2 Northeast, Dist. 1 Southeast, Dist. 5 Southeast, Dist. 6 East, Dist. 7 Scott FLY Mike ZORN Mary KARR-ELLIS Scott STARK Finley EWING, IV Tony PACK Julie HERRERA North, Dist. 10 Central, Dist. 11 Northeast, Dist. 9 Northeast, Dist. 8 Central, Dist. 12 Central, Dist. 13 Central, Dist. 14 Will CHURCHILL Mark STEVENSON Natasha DEL BARRIO David ZWIACHER Jose POZOS Joseph SHIELDS Jimmy BASS Southwest, Dist. 24 West, Dist. 25 North, Dist. 23 North, Dist. 22 Southwest, Dist. 26 South, Dist. 27 Northwest, Dist. 28 Bill POLLARD, JR. Tony GULLO JR. Sherri HERRING Tobias FULTON Patrick SYKORA Cory DUPRIEST Drew HOY Northwest, Dist. 31 West, Dist. 32 Northwest, Dist. 30 West, Dist. 29 Southeast, Dist. 33 North, Dist. 34 Northeast, Dist. 35 Rick WALLACE James BENNIE Art KIOLBASSA T. HARPER Brent MCGAVOCK Mike SULLIVAN Chris GILLMAN Bently DURANT Carl SEWELL, III Brandon TOMES James BAGAN Howie BENTLEY Jason GONZALEZ Benny BOYD Metro Chair Director-At-Large Metro Chair Director-At-Large Metro Chair Director-At-Large Metro Chair Director-At-Large Metro Chair Director-At-Large Metro Chair Director-At-Large Metro Chair Director-At-Large Melissa DEMONTROND Kenny McCARTY Carlos LIRIANO Jennifer YODER Pat SCHUCHART Chris WALL South, Dist. 17 South, Dist. 18 West, Dist. 16 Southwest, Dist. 19 South, Dist. 20 Southwest, Dist. 21 2024 District Directors Enrique LANCE Southeast, Dist. 15 DEALERS’ CHOICE 18
Key Director Award Winner C.J. Barnett Each year at our annual convention, we honor a member of the TADA board of directors who has contributed to the success of the organization. The award is the Walter B. Wainwright Key Director Award, named for the revered former leader of the Houston Automobile Dealers Association. This is the only TADA award that is kept a secret until the moment it is presented at the conference. This year’s winner started in the car business at Penske Auto. He worked in the Parts department doing jobs like cleaning the shop and stocking inventory. His hard work and dedicated effort allowed him to make his way up the ranks. As with most dealers, he has a passion for cars. His dad recalls gifting him his first vehicle as a teen: an old Chevrolet Malibu with the interior backseat floors eroded away. He laughingly recalls having to use tin to cover the holes in the floorboard. He definitely was an expert at making the very best with what he had been given. During his time as a salesman and sales manager, he was remembered by his catchy slogan: “selling cars like candy bars.” And he was good at selling lots of them. When he is not working, he enjoys golf and bowling. His biggest hobby, though, is spending time with his daughters — he has four of them — and his grandchildren. Ladies and Gentlemen … your TADA Key Director for 2024, C.J. Barnett. DEALERS’ CHOICE 20
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TADA Annual Conference and Board Meeting in Photos Omni PGA Frisco Resort — April 14-15, 2024 DEALERS’ CHOICE 22
23 DEALERS’ CHOICE
A common occurrence, routinely seen amongst employers, is an employee’s refusal to sign workplace policies or warnings. Although employers cannot force an employee to sign the required documentation, this article provides tips and strategies that employers can utilize when an employee refuses to sign workplace policies or warnings. Mandatory Staff Meetings One way to combat an employee’s refusal to sign a company policy is through mandatory staff meetings. Prior to the meeting, employers should publish the agenda, which specifies that an item for discussion will be the distribution and analysis of the new workplace policy. Similarly, a proper attendance log should be maintained so that the employer preserves/retains proof of who was in attendance. When it comes time to discuss the work policy, the manager in charge should distribute the policy to everyone in attendance. The policy should be discussed thoroughly, such that its contents are sufficiently explored. Upon providing sufficient time for employees to review and answer any questions concerning the policy, the employer should distribute copies of the policy acknowledgment form and have its employees sign and acknowledge the document. An individual in a managerial or supervisory position should thereafter collect the acknowledgment form and keep it in the employee’s file for documentation purposes. After the meeting, the employer should publish the minutes of the meeting. Special emphasis should be taken to show that the policy was discussed, individuals in attendance received a copy, and finally, employees were asked to return a signed acknowledgment of receipt. To access the sample acknowledgment form, scan the QR code. https://efte.twc.texas.gov/ acknowledgment_of_receipt_of_employee_handbook.html Computer Acknowledgment Screens Another method to tackle an employee’s refusal to sign the employer’s policy is through publishing the new workplace policy on the employer’s computer login page. The employer should work with their IT department to make sure that the option to click the prompt detailing acknowledgment only appears after the employee scrolls to the end of the new policy. What About Warnings? An employee’s refusal to sign a warning admitting fault can lead to a thorny, and oftentimes, an awkward situation for the employer. One of the most tried and true methods to combat such a situation is by providing two spaces for the acknowledgment of a warning — one which states, “I agree with the reason for the warning” and another, “I disagree with the reason for the warning.” When the employer provides the warning, afford the employee the option to choose and sign either of the two choices. If the employee does so, then they will be unable to make a credible claim that they never saw the warning. Finally, if the employer provides a work-related warning, they should make sure that a company witness is present for the meeting in which the warning is provided. Having a qualified witness will not only suppress any attempted allegation of non-receipt, but the witness’s firsthand testimony at a later unemployment hearing could quash a claimant’s possible claim of alleged signature forgery. The employer should make sure that they give the employee a copy of the warning prior to, or immediately after, the termination of the meeting. For questions about this issue, or any other employment-related matters, employers can call our employer hotline at (800) 832-9394, or email us at employerinfo@twc.texas.gov. Disgruntled Employees How To Handle an Employee’s Refusal to Sign Workplace Policies or Warnings By Jikku John, Legal Counsel to Commissioner Joe Esparza DEALERS’ CHOICE 24
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Background Back in May, Sergeant Darren Schlosser, with the Houston Police Department Auto Theft Division — Vehicle Fraud Unit, conducted a webinar on “Vehicle Finance Fraud, aka How to Steal a Car with a Pen.” As the webinar could not be recorded, a summary of Sergeant Schlosser’s information is provided below. Types of Vehicle Fraud Vehicle financial fraud is estimated to cost the U.S. approximately $8.3 billion annually. The following are a number of ways that fraud is committed: • Document fraud occurs when a person uses their real name, DOB, driver’s license or SSN but produces fraudulent documents to increase their creditworthiness, such as paycheck stubs, utility bills, bank statements and insurance cards, because they are unable to qualify for a vehicle loan on their own merit. Fraudulent documents are used to inflate income levels and create a false job history and other financial information. • Identity theft occurs when one person steals the personal identifying information (PII) of another in order to steal their credit. This act entails the unauthorized use of another person’s name and PII, such as DOB, driver’s license number and SSN, to open new accounts for committing auto theft. • Credit Privacy Number (CPN) resembles a nine-digit SSN. A CPN is typically obtained under the belief that the person is attempting to protect their SSN or rebuild their credit history. A CPN can be acquired through websites for a fee or created by an individual using a child’s stolen SSN. The use of a CPN in lieu of an SSN is fraudulent. • Synthetic identity occurs when a person uses a fraudulent SSN in conjunction with either a Full Synthetic Identity or a Hybrid Synthetic Identity. This accounted for up to 20% of credit losses or approximately $6 billion in 2023. Fully Synthetic Identity An individual with a fully synthetic identity: • Creates a false name, DOB, DL and obtains a CPN. • Obtains a credit card under a false name and makes purchases and payments. • Builds a fraudulent profile to an 800+ Beacon score. • Creates fraudulent documents to support the fake name, such as employment records, paycheck stubs, bank records and utility bills. • Obtains a burner cell phone for fraudulent ID use and employment information. • Submits online credit applications to limit face-to-face interaction. • Enters a dealership only after credit approval. Hybrid Synthetic Identity An individual with a hybrid synthetic identity: • Uses their own identifiers such as name, DOB and DL. • Uses a “credit repair agency” to obtain a CPN. • Uses some fraudulent documents such as paycheck stubs, insurance cards and utility bills. • May be detected when the credit report has only recent activity. Problems Identifying Synthetic Identities Synthetic identities are often undetected by finance companies and seldom reported to law enforcement for a few reasons: • It is difficult to verify because no person exists to be a complainant, unlike identity theft. • It can be a “first payment default” or a few payments made in order to slow discovery. • Finance companies are reluctant to provide information due to “privacy laws.” Examples of Fraud Artificial Pay-off “X” makes a payment on their vehicle. “X” goes to trade in their vehicle and the dealership contacts the lender for a payoff. Dealership reflects the pay-off on the new purchase and shows the difference on the new retail installment contract. The dealership is unable to obtain the title on the trade because the lienholder informs the dealership that “X”’s payment bounced, and in order to obtain the title, the dealership must pay an additional amount to cover the NSF payment. Oftentimes, a large lump-sum amount is sent to the lender prior to trading in the vehicle so that the payoff appears to be much less. How to Steal a Car with DEALERS’ CHOICE 26
VIN Swap and VIN Clone A VIN Swap or VIN Clone allows an unsuspecting buyer to purchase a stolen vehicle. This happens when the VIN of a wrecked vehicle is used on a stolen vehicle. A stolen vehicle’s VIN is changed to reflect the VIN of a similar model, make and color. It is likely a vehicle sold in another country and not easily recognized because the VIN conforms to a true vehicle. U.S. registrations do not communicate with other countries, such as Canada or Mexico. Finance Fraud Trends • Suspects are both male and female. • Suspects make multiple vehicle purchases in a short time period. • Suspects use fake DL and ID cards. • Parents may use their children’s identifiers. • Internet purchases are made with cars being shipped to the buyer. a Pen Characteristics and Clues to Watch For • Comes to the dealership near closing time, on weekends or when the dealership is very busy. • Fast and hurried transactions. • If texting/calling during the buying process, look for a Bluetooth device. They may be receiving instructions from a third party. • Little to no negotiation on the vehicle price. • Willing to purchase any/all F&I products. • Multiple vehicle purchases in a short period of time. • Temporary or paper ID documents. • Little or no down payment, less than $2,500. • Paperwork to be sent overnight to be signed. • Vehicle to be shipped out of state. • Fraudulent information on credit application. • Fictitious addresses. • Fictitious proof of employment, like fictitious pay stubs. • Fictitious proof of residency, like fictitious utility bills. • Fictitious proof of insurance or immediately canceling the policy upon purchase. 27 DEALERS’ CHOICE
What To Do To Deter Vehicle Finance Fraud • Check the identification. Invest in an identification system such as a driver’s license ID system. If a transaction is remote, obtain a color copy of the ID and ask for a “selfie” with the ID for physical verification. Prior to delivery, require a taped video conference to review the contract. • Gather the proper documents. Look for abnormalities in documents. Check font size and different types between the name and the standard print. Look carefully at the background in the driver’s license photo. • Look beyond the documents. Verify cell numbers and email addresses. Have the salesperson send a text and email to the purchaser, which requires a response that is read back to the salesperson. REMEMBER: Do not send a text without obtaining consent from the receiver. It is preferable to obtain consent to contact in writing so there is no misunderstanding. (Telephone Consumer Protection Act). • Research the purchaser. Search the internet for social media accounts using their name and cell phone number. Check the home and employer’s business addresses on available maps. If the address is an apartment complex, obtain the complex’s listed number and verify. Ask yourself, does the income reflect the job title? NOTE: If the provided information does not coincide with the internet, it does not necessarily mean the information is fraudulent; however, it requires further investigation. Dealership Security Precautions • Use surveillance cameras and equipment that record and capture details. • Scan documents in color, especially IDs. • Keep documents with PII secure and not left unattended. REMEMBER: The FTC “Safeguards” Rule requires the dealership to ensure the security and confidentiality of customer information, including protecting the dealership’s systems against anticipated threats or hazards and unauthorized access or use of customer information. Limit and monitor who can access a customer’s personal information and encrypt information. • Vehicle keys/fobs should be logged in and out by each employee in order to track who was in the vehicle and when. Use a tamper-resistant key ring to avoid an easy swap of a traditional ring, as most key fobs are designed to release a hidden physical key inside while still attached to the ring. A criminal can easily replace the keyless fob with a “dummy” fob. Avoid putting both keys on the same key ring. If one fob is swapped, the other fob will still work and you’ll know the swap occurred. Require each salesperson to physically push the lock and unlock buttons after each viewing and before the customer leaves. This will ensure the key/fobs are operational and may identify any suspects before they leave the dealership. If you suspect a key/fob swap has occurred, immediately put the vehicle in a secured location and wipe the memory from the previous keys/fobs. The typical MO for the key/fob swap is to come back either late at night or early in the morning to retrieve the vehicle. • Secure the most valuable vehicles so that they cannot be easily driven away. • Create a document with a thumbprint section. Utilize a digital fingerprint capture device, ensuring the images are crisp and the ridges are prominent for identity theft precaution. • Record the finance process. How To Respond to Fraud If you know a person inside the dealership is presenting fraudulent information: 1. Call the responding police agency and tell them the suspect is still on-site and to elevate the call to an “in-progress” status. 2. Obtain photographs of the suspects, their vehicle and license plate. 3. Try to stall the person until the police arrive. If the fraud is discovered after the purchase: 1. Make a folder with clear copies of the purchase documents. 2. Make a copy of all correspondence. 3. Type a transaction summary, including dates, times and all employees involved. 4. Make a police report ASAP. 5. Follow up with the assigned investigator. Sergeant Schlosser has been in law enforcement for 27 years and supervises the Auto Theft Division, Vehicle Fraud Unit for the Houston PD, with a focus on criminal investigations involving suspects who use fraudulent identification to purchase vehicles at dealerships. He also serves as a board member for the Texas Department of Motor Vehicles. DEALERS’ CHOICE 28
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NTXAD Fast Track Program During the last week of May, North Texas Automobile Dealers (NTXAD) sponsored Fast Track Auto Tech Training Program to address the critical shortage of available qualified automotive technicians felt by dealers across the country. A select group of 36 recent high school graduates from across North Texas took the first step toward a lucrative high-tech career as automotive technicians. DEALERS’ CHOICE 30
Huffines Auto Dealerships Celebrates 100th Anniversary Huffines Auto Dealerships, one of North Texas’ largest automotive groups with 10 Dallas/Fort Worth-area dealerships, celebrated its 100-year anniversary this past spring. Founded on May 5, 1924, in Denton, Texas, by J.L. Huffines Sr., the family-owned and -operated business has grown across a century, continuously embodying the principles of treating customers with respect and actively supporting the local community. To celebrate the company’s iconic “Huffines HAS IT!” jingle introduced more than 30 years ago, the auto dealerships are taking to the streets to ask area residents to sing the song. For every jingle sung, Huffines will donate $100 to the singer’s local charity of choice, including the Boys & Girls Clubs of Greater Dallas, Genesis Women’s Shelter, North Texas Food Bank, Salvation Army, Scottish Rite for Children and SPCA of North Texas, as part of its longtime commitment to giving back to the communities it serves. “For the past 100 years, my family and I have been able to serve North Texas and become a household name to many. Our longevity in this competitive industry reflects the trust and loyalty our customers and the community have placed in us, and we want to thank them for their ongoing support,” said Huffines Auto Dealerships President and CEO Ray Huffines. “Our family legacy started when cars were a new thing, and Dealer Service and Honors DEALERS’ CHOICE 32
today, we’re selling high-tech EVs, hybrids and gasoline-powered vehicles with features no one would have dreamed of 100 years ago. We can’t wait to see what the next hundred years will bring to this industry, our dealerships and the communities we serve.” In honor of Huffines Auto Dealerships’ century of dedication to team members, customers and North Texas, the Texas Historical Commission has recognized Huffines with the coveted Texas Treasure Business Award. The award, created by the Texas Senate in 2005, pays tribute to the state’s well-established businesses and their exceptional historic contributions to communities across Texas. When the Huffines Motor Company first opened its doors in Denton, Texas, it sold Willys-Knight and Overland automobiles. Over the years, Huffines Auto Dealerships adapted through economic changes and challenges, including the Great Depression, when J.L. Huffines Sr. famously accepted livestock and farm implements in trade for vehicles. Following J.L. Huffines Sr.’s footsteps, J.L. Huffines Jr. became a dealership owner in 1950, at age 27, after serving in the U.S. Army during World War II. As CEO and president, he grew the Huffines brand tremendously across different locations throughout North Texas and was recognized statewide and nationally as an automotive industry leader. In 1984, J.L. Huffines Jr.’s son, Ray Huffines, became a dealership owner at 31. He continues to grow the Huffines’ legacy, which now spans 10 dealerships offering multiple brands that include Chevrolet, Chrysler, Dodge, Jeep, Ram, Kia, Hyundai, Subaru and Genesis. The company has more than 900 employees and has been voted one of The Dallas Morning News Top Places to Work 11 times. It has also been awarded multiple J.D. Power Dealer of Excellence Awards and has been consecutively named Dallas’ Best Automobile Group Dealer by Consumers Choice. Today, Huffines Auto Dealerships is led by General Manager Sam Huffines, a fourth-generation dealer. Sam continues to implement the Huffines family’s founding principles and beliefs that when you help someone buy a vehicle, you have made a friend for life. For more information, please visit www.huffines.net. Continued on page 34 33 DEALERS’ CHOICE
Sterling McCall Hyundai Grand Opening Sterling McCall Hyundai held its Grand Opening in Houston, Texas, on May 7. In addition to music, food and fun, a $10,000 check was presented to Storm Baseball, a local youth sports league. Continued on page 36 DEALERS’ CHOICE 34
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Lost Pines Toyota Welcomed at the Festival de La Cultura! The Festival de La Cultura on April 27 was a feast for the senses — with music, dance, food and art. The celebration of Hispanic heritage took place at Mayfest Park in Bastrop, Texas. The festival was a vibrant tapestry that wove together the unique threads of Latin America, the Caribbean and beyond. Lost Pines Toyota and Toyota Way Forward, proud sponsors of the event, played a pivotal role in making this celebration possible. Carlos Liriano, the owner of our dealership, was among the prominent speakers at the festival, delivering an inspiring speech on the importance of community and solidarity. His words resonated with the attendees as he emphasized the need to lean on each other for support and strength in both good times and challenging times. In addition to his inspiring speech, Liriano made a generous announcement: In collaboration with Toyota Way Forward, Toyota donated to bring awareness and care for traumatic brain injury in children to the rural Bastrop County area. This donation underscored the company’s commitment to giving back to the community and ensuring a brighter future for the children of Bastrop and surrounding regions. DEALERS’ CHOICE 36
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Commemorating D-Day From Paris to Normandy … April Ancira Thompson of Ancira Auto Group celebrated her grandpa as he traveled back to Normandy for the ceremony commemorating the 80th anniversary of D-Day! Now that you are reaping the harvests of your success, what are you doing about planting the seeds for tomorrow’s success? The time for sowing the seeds for future success is when you are successful! Now is not the time to relax. Make sure you have the right business partner relationships that will help carry you into the future, not live on past successes! 24 years of putting YOUR dealership profits FIRST! WWW.FIRSTINNOVATIONS.COM WWW.FIRSTINNOVATIONS.COM Find Out What Hundreds of Dealerships Across The Country Already Know The First Group Family of Companies Better Products • Better Prices • Better Service DEALERS’ CHOICE 38
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Texas Automobile Dealers Association 1108 Lavaca, Suite #800 Austin, TX 78701 THIS MAGAZINE IS DESIGNED AND PUBLISHED BY THE NEWSLINK GROUP, LLC | 1.855.747.4003 Jim Stephenson, VLK Principal of Automotive jstephenson@vlkarchitects.com | 817.633.9620 CREATING EXEMPLARY DEALERSHIP DESIGNS FOR OVER 40 YEARS. Learn more about our dealership design excellence. Patrick Genesis, Schaumburg IL Opening Summer 2024
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