Avoid Getting Trapped in Internet Web

Ask any car dealer about the biggest change in the business in the last decade, and I bet the most frequent answer will be the role of the Internet.

Today, most consumers begin their vehicle shopping trips (and some end them) online.  Internet issues dealers face require vigilance.  Here are some things that dealers should consider.

Social Media. Consumers are using social media to talk about dealerships with which they do business. Other than using a reputation-management strategy and making sure every customer is satisfied, a dealer can’t do much about negative postings from unhappy customers. 

However, dealer employees are using social media, sometimes to the detriment of their employers. Dealers can do something about that.

Every dealer must have a policy governing email and Internet use, with rules governing employee use of social media. Adopt it, train employees, and enforce it.  Because of the rapid pace of change, regularly review and revise the policy to deal with new challenges.

Phony Reviews. While a dealership must vigilantly build and protect its reputation, phony reviews are not the answer.

Seeking positive reviews for a dealership is part of reputation management. Happy customers are less energized to post their experiences than unhappy ones. So building a database of positive reviews can help offset possible negative postings.

However, false submissions could have a long-term negative impact on a dealer. Websites carrying reviews use sophisticated tools to ferret out phony submissions. 

A pattern of bogus positive postings could lead a website operator to take down all reviews of a dealer, including legitimate positive ones.

The operator of a well-known website recently sued an online reputation-management company alleging it posted fraudulent reviews to enhance the reputations of the dealers it represented.

Foster your online reputation, but do it through actual customer experiences and reviews.

Posting Employee Information and Pictures. Dealers are always looking for ways to make their Web presence friendlier. Increasingly, dealers are choosing to “personalize” their websites by adding information concerning employees and their pictures.

However, what if an employee doesn’t want information and a picture posted? An employer must recognize that personnel may have reasons for that, such as harassing ex-spouses, potential stalkers or simply the desire to maintain privacy. Before posting, discuss employee wishes. Make clear postings are voluntary. Get written consent.

Advertising. For many dealers, the Internet is the most important advertising medium. As a result, government regulators increasingly are looking at dealer online ads. Internet advertising must comply with state and local advertising requirements, as must all advertising. 

The Dodd-Frank financial reform act gave the Federal Trade Commission enhanced authority and more funding to regulate the practices of auto dealers. The agency has been using that to concentrate on dealer advertising.

In 2012, the FTC announced five consent orders with dealers who had advertised, often on the Internet, that they would pay off the trade no matter how much the customer owed. 

The FTC announced two new proposed consent orders for dealership Internet advertising of prices or discounts often using manufacturer incentives or rebates of limited availability without disclosing qualifications that apply.

If you wish to avoid the scrutiny of the FTC and other enforcement agencies, don’t advertise prices or discounts with just the disclaimer that they reflect programs of limited availability or words to that effect.

Ads with prices or discounts resulting from programs of limited availability must disclose the terms and restrictions of those programs.

FTC scrutiny is increasing, and the agency’s actions are emboldening state and local regulators. Make sure employees in charge of advertising and your ad agency understand the rapidly changing compliance requirements.

Michael Charapp is a lawyer who represents auto dealers. Based in McLean, VA, he is at 703- 564-0220 and [email protected].