Back to Podcasts
Back to Podcasts

Practices That Lead to Legal Trouble for Dealers and How to Avoid Them with Tom Kline 

  • October 8, 2023
21 min read
Practices That Lead to Legal Trouble for Dealers and How to Avoid Them with Tom Kline 

Ilana Shabtay
VP of Marketing, Fullpath

Tom Kline
Lead Consultant & Founder, Better Vantage Point

Tom Klein is the lead consultant and founder at Better Vantage Point. Tom has 30 years of experience as a dealership owner and has worked with both public and private dealers to solve problems, keep customers happy, and stay out of court. He is an endorsed expert for Dealer Marketing Magazine, the Recreational Vehicle Dealer Association, the VIADA, and the CIADA.

Here’s a glimpse of what you’ll learn:

  • Tom’s experience at ASOTUCON 2023 
  • How data connectivity has become a central conversation in the automotive industry
  • How the increase in regulation around manipulative business practices are impacting dealers
  • How politics impact policy when it comes to regulation and compliance 
  • Specific examples of issues dealers should look out for when it comes to getting insurance coverage and maintaining legal compliance
  • The actionable steps dealers can take to stay in compliance 
  • Tom’s predictions for what’s to come over the next year in automotive.

In this episode…

Creating good customer experiences at your dealership is not only good for business, but it can help you avoid a whole host of legal problems. 

Across the US, Attorneys-General at the state level have begun cracking down on deceptive or manipulative business practices and dealerships are taking center stage of this action. From posting or buying fake reviews, to sharing incorrect information on a dealership website, regulators are working to crack down on manipulation tactics dealers may use to drive customers into the showroom. 

In the latest episode of Inside Auto, Tom Kline shares with Ilana Shabtay more about the specific behaviors that are being marked as deceptive and the practical steps modern dealers should be taking to stay out of legal trouble – from insurance policies to best practices around data protection and beyond. 

Resources Mentioned: 

Sponsor for this episode…

This episode is brought to you by Fullpath (formerly AutoLeadStar).

Fullpath is the automotive industry’s leading customer data and experience platform (CDXP).

Fullpath enables dealers to turn their first-party data into lifelong customers by unifying siloed data sources and leveraging that data to create exceptional, hyper-personalized customer experiences.

To learn more, visit

Episode Transcript:

Ilana Shabtay (00:26.066)

Ilana Shabtay here, host of Inside Auto Podcast, where we interview top dealers, GMs, marketers, entrepreneurs, and thought leaders in and out of the automotive industry. And before we introduce today’s guest, this episode is sponsored by Fullpath is the automotive industry’s leading customer data and experience platform, CDXP.

Fullpath enables dealers to turn their first-party data into lifelong customers by unifying silo data sources, excuse me, and leveraging that data to create exceptional hyper-personalized customer experiences. To learn more, visit Today’s guest is Tom Klein, lead consultant and founder at BetterVantage. Tom, how you doing?

Tom Kline | Better Vantage Point Consulting (01:15.844)

I’m great, it’s always good to see you.

Ilana Shabtay (01:18.418)

Good to see you too. And as our veteran listeners might know, this is your second time on the podcast, so I’m very thrilled to have you back. Second time. Yeah. It has been.

Tom Kline | Better Vantage Point Consulting (01:25.308)

Thank you, it’s great to be back. It’s been a couple of years. It was almost like the beginning of COVID.

Ilana Shabtay (01:34.434)

Wow, that’s insane. That means you were one of maybe my top, my first top 10 guests, so.

Very honored to have you back on the podcast. For those of you who didn’t hear the first time around, first of all, go back and listen to that episode. But second of all, Tom has 30 years experience as a dealership owner and has worked with both public and private dealers to solve problems, keep customers happy, and stay out of court. He is an endorsed expert for Dealer Marketing Magazine, the Recreational Vehicle Dealer Association, the VIADA, and the CIADA, more exciting things to your bio. Glad to have you back.

Tom Kline | Better Vantage Point Consulting (02:16.028)

Thank you. Thank you very much.

Ilana Shabtay (02:18.618)

Okay, so we know what you’ve been up to. We know what you’ve been doing. I’d love to hear on this podcast more of the trends from 2022 and 2023, an updated version of all the mistakes that dealers are making and how they can avoid it. But before we get into that, I know you just got back from a SOTU con. I’d love to hear about what the conference is like for you. So, we’re gonna go ahead and get started.

Tom Kline | Better Vantage Point Consulting (02:39.844)

Yeah, it was very high energy, which was great. Kyle and Paul are great hosts and make huge efforts to make everyone feel welcome, to make everyone want to learn, to have an open environment. And so that was energizing and it was fun and they tried to keep things moving quickly. So it was pretty well attended.

Uh, it was big. The, the, the place where they had it was, uh, a casino called live, uh, which was, uh, another high energy, you know, casino pumping oxygen into the casino kind of thing, um, so it was fun. It was, it was great to connect with, you know, some of them, some of my industry friends and colleagues and, uh, and always see how they were doing. And just keep up to date on what’s going on.

Ilana Shabtay (03:40.502)

Was there a theme or an unofficial theme? Do you feel like everyone was talking about one specific thing?

Tom Kline | Better Vantage Point Consulting (03:50.744)

I think that data, along the lines of the importance of what Full Path does, data is increasingly an asset that dealers, I think, are not necessarily tuning into. And so there are a lot of…

people talking about what to do with data and how it happens and where it goes and where it shouldn’t. And then based on the new regulations, so the Graham Leach Bliley updated regulations went into effect on June the 9th of this year. And so there was lots of conversation around

how the data’s flowing between the CRM and the website and what dealers are doing with it and taking control, dealers taking control of their data. That was a lot of conversation that I heard.

Ilana Shabtay (04:46.898)

Interesting. Okay. Thank you for sharing with us. I was very sad that I missed it this year. I had a lot of FOMO So hopefully next year I can make it But they always do a great job and there’s always a lot of energy I feel like people come out of those conferences extremely re-energized and excited about working for the automotive industry and working in the automotive industry and I Mean, I just can’t give them enough credit for bringing that energy to all of us

Tom Kline | Better Vantage Point Consulting (05:10.993)

Right. And I think it’s probably noteworthy to mention that the guest, their main speaker, whose name escapes me at the moment, was the owner of the Savannah Bananas. And I don’t know if you know, the Savannah Bananas is a baseball team and basically they kind of turned baseball on its head and made it extremely entertaining and I’m not saying that in a pejorative way because my wife is a huge baseball fan and we’re going to one of the playoff games next week. But they just made it fun and how they did it and why they did it and what their goals were. It was interesting to hear how he started and then where he’s ended up and how he’s trying to make everything fun. And he challenged everyone in the room to rethink their paradigms about how they’re.

how they’re helping their customers or if they’re helping their customers or what the process is like to buy a car. He apparently bought a car a couple weeks prior to the convention and was telling everyone about that experience and how difficult it was and how awful it was and how he didn’t enjoy it. So he really challenged everybody for the dealers in the room and I guess vendors likewise- the car buying process to make it more enjoyable or a little more enjoyable or very enjoyable or whatever word you want to use like you know around that.

Ilana Shabtay (06:49.074)

Yeah, that’s great. I love that. And there’s a nice parallel between, for me at least, not for your wife, but there’s a nice parallel between like watching a baseball game and having to go buy a car. So I love that. So moving on to the trends that you’ve been seeing, you know, I know you really consult with dealers and make sure that they’re staying on top of all the legal, to make sure that they don’t end up in court. So…

2022, 2023, get us up to speed. What are some of the patterns you’ve been seeing, the mistakes that you’re seeing over and over again, things, you know, the top two things you think dealers should be looking out for and or taking care of?

Tom Kline | Better Vantage Point Consulting (07:24.636)

Sure. So, I’m going to kind of divide it into two silos. I’m going to talk about risk and I’ll talk about compliance. First, I think it’s noteworthy that the enforcement against dealers has increased tremendously. So, there are a lot more cases where the attorney general… the attorneys general at the state level are starting to fine dealers for their practices. There was a case in Alaska where a dealer was fined for deceptive practices.

There was a case in New Hampshire where dealers were fined for deceptive practices. I believe there was a case in Vermont where dealers were fined for deceptive practices. And those deceptive practices were areas where the dealers were taking advantage of consumers either by not disclosing what was going on or having erroneous website information on their website that led customers into the store.

They couldn’t actually buy the car for the advertised price. So there’s a lot of bait and switch allegations. And again, Alana, because these aren’t all my clients, I can only say that these are the allegations and this is what I read in the press. And then we’ll talk about what I do with my dealers and what I’m seeing in that realm. But if you’re not taking care of your customers and you’re trying to be deceptive, and sometimes it happens intentionally and sometimes it happens unintentionally. And I think the most important thing is for dealers to listen to the feedback that they’re getting either through their managers or through the internet, through reviews when somebody says I got screwed and here’s how I got screwed.

It’s great way to pay attention to what’s actually going on in your organization for the dealer to dig in and find out what happened in those situations to find out if it was unintentional or maybe it is intentional. You don’t know. But for certain, the Federal Trade Commission has increased its enforcement of a whole variety of businesses, the automotive business included.

There’s a practice called astroturfing. And astroturfing is where you’re posting fake reviews from customers who don’t exist, or you’re substituting reviews in a way that’s manipulative. Anything that’s manipulative, the regulators are looking at.

Ilana Shabtay (10:18.646)

How can you even, I mean I know so many softwares that I’ve used at least to upload reviews. It’s like you have to put through so much proof that you’re a customer to add that review. It’s interesting. They get away with it.

Tom Kline | Better Vantage Point Consulting (10:29.036)

Yeah, I mean, some, there’s, there’s one case the FTC cited where a vitamin company actually was advertising for one vitamin and they had thousands of reviews on that, but then they substituted a different product in somehow and did it that way. But, but it’s the same thing if you’re creating. Yeah.

Ilana Shabtay (10:47.589)

Right, super manipulative. That’s a great word, yeah.

Tom Kline | Better Vantage Point Consulting (11:00.076)

who didn’t buy a product from your store to post reviews, that’s astroturfing. It’s against the law. Right? So, all these are just various ways of manipulating customers and if you’re trying to manipulate customers in a negative way, then you’re, you know, you open yourself up for that kind of liability. So, the regulatory environment has certainly increased. I don’t see that changing.

Of course, it could change in January 2025 if we have a change in politics and we have a different kind of president who would do something different Whatever that looks like because politics does influence the regulatory environment, of course so stay tuned for that hard to know what will happen there, but Certainly there’s an increase in regulation and the only way to silos that I mentioned.

Ilana Shabtay (12:12.166)

Interesting. Now, do you think that dealers… I don’t know how to say this in a politically correct way. Hold on. Do you think that dealers are really thinking, or even business owners in general, how much do they take that into account when they’re thinking of new legislation? And do you get involved in that? Like, is that something that you’re thinking about regularly? Because it’s interesting that you mentioned January 2025. It might change.

Tom Kline | Better Vantage Point Consulting (12:40.292)

Yeah, I mean, you have to consider when you’re running a business with hundreds of employees or anywhere from 50 to 200 employees, there are a lot of considerations, right? And politics is one of them because it does influence what happens specifically in the auto businesses. We’re one of the most regulated industries around. So how the Federal Trade Commission is going to enforce those regulations. In fact, I read this morning in the Wall Street Journal, the Supreme Court is taking up the case of the Consumer Financial Protection Bureau, and whether their funding mechanism is actually against the Constitution. And so, there’s a potentiality that the CFPB won’t get their funding anymore. Now, I haven’t read….the right wing in this country is challenging that in order to try to reduce regulation on businesses. So the way…

Ilana Shabtay (13:52.342)

And that, and just enlighten me for a second, that means that they will get fewer funds? Interesting.

Tom Kline | Better Vantage Point Consulting (13:57.808)

Fewer funds, correct. Potentially fewer funds, potentially no funds as I understand it. So again, I haven’t read the case, I just read the article this morning and I try to keep up on those kinds of things because it does impact. Now what can a dealer do about that? A couple of things. Number one, going back to our two silos here. On the risk side. So on the risk side, a dealer should walk around their dealership and say to themselves, what could happen and how would I deal with it? What would happen if a vehicle fell off a lift and someone got injured, how would I handle that? What would happen if we had a car accident and that created an injury? How would our insurance respond to that? Do I have enough insurance? What if we had a cyber breach? Now that’s part of the Graham Leach Blyley Act.

Ilana Shabtay (14:51.206)


Tom Kline | Better Vantage Point Consulting (14:57.376)

that dealers were supposed to comply with by June the 9th. What would happen if we had a cyber breach and somebody tapped into our CRM and got all our names or in the DMS and got all our names? How do we handle that? Do we have cyber insurance? Have we considered cyber insurance? There are so many items on the insurance side that…You know, what typically happens at a dealership is the broker runs in a week before the renewal and says, sorry, you only have a 9.5% increase. And then they smile and the dealer goes like this. And this is awful and this sucks and how do I prevent this? And there are ways to prevent that, which is you demand of your broker, they bring in the quote 60 days early so that you can look through it, right, and understand what’s in it. The human brain can’t possibly conceive of all of the line items in an insurance policy, and so you need someone to help you make sure that all your boxes are checked, so to speak, and that you have the right coverages

if something happens that you have the right insurance. A good quick example of that is a lot of dealers haven’t looked at…

There’s a line item in the garage policy, which is your main policy, covering transport. So if your transporter doesn’t have the right insurance to make sure that you do. So these car haulers haul eight or nine cars. And because the cost of vehicles have gone up so much, eight or nine cars now,

the average vehicle’s 48,000 and change, so call it 50,000, that’s $450,000 of cars average on a car hauler. Most insurance policies I see with dealerships only have $250,000 of coverage, right? So if the car hauler’s insurance was expired, then the dealer’s on the hook for the difference between the 450 and the 250. So it’s a $200,000 problem. And these things happen all the time.

Ilana Shabtay (17:15.186)

Yeah, it’s okay. Here we go. This is my next question for you, which is that you have so much information when it comes to this Which is incredible. Seriously impressive. My head is spinning and I don’t even own a dealership. What is

What would you, if a dealer’s listening to this, what are one or two things, I know that there’s probably a million, but what are two things that you think that they should start with, or they should be looking at when they’re trying to make sure that they have all the docs in the roll, trying to make sure that they have all the right insurances, with the right amount. There’s so many new regulations that are coming out. I mean, you’ve mentioned three in the past five minutes. How are they supposed to keep up? Obviously, there’s obviously a better vantage point, but beyond that they can start doing at the dealership that you think can help them just stay in line with the law because it just seems incredibly complicated, complex.

Tom Kline | Better Vantage Point Consulting (18:06.876)

It is complicated, but I’m going to tell you a story and then I’m going to answer your question directly because I think this story is super helpful. So I read about a dealer in automotive news that had a $250,000 problem. So I called the dealer on the phone and I said, if I understand the problem, this is what it is. She said, yes, that’s what it is. I said, well, have you looked in your insurance policy under this section to see if you have coverage? She said, yes.

In fact, I called my insurance agent and they said I had no coverage and I said, I completely disagree. I’m sure you do. This is a five minute conversation. I’m sure you have coverage under this area. It’s very rare not to make a claim against your insurance policy and call me back and let me know. So three, four months later, we had a conversation. I saved her $250,000 in five minutes. So the reason I bring that up is… Having familiarity with what’s in your policy is super important. So the first thing to answer your question is it isn’t sexy and it isn’t fun, but my recommendation is spend 10 minutes a day looking at one section of your insurance policy or make your insurance broker spend 10 minutes a day or one hour a month or whatever it is so you start familiarizing yourself with what coverages you have.

Ilana Shabtay (19:10.894)

It’s a nice baseline, right?

Tom Kline | Better Vantage Point Consulting (19:34.788)

because insurance can often be a solution to a big problem. But it won’t be a solution for you if you don’t know that you have it. And the only way to know that you have it is to sensitize yourself to it.

Ilana Shabtay (19:48.186)

Right. So that’s a very good actionable, practical… I mean, I should even do that with my car insurance. I mean, it’s a great way to be familiar with what you’re actually paying for and how you’re actually covered so that you don’t get screwed. Can you imagine if you’re like, oh, I don’t have that coverage, I might as well pay $250,000? I mean, that’s incredible that you save that dealer so much money.

Tom Kline | Better Vantage Point Consulting (20:07.588)

Yeah, and I see that all the time. I see that all the time. Because often, insurance is the solution to a problem that you have that you don’t know how to get your way out of.

Ilana Shabtay (20:18.494)

Yeah, definitely. And before we sign off here, I’d love to know any predictions that you have for the next 12 to 18 months, whether it’s within your expertise or outside your expertise for the automotive industry. I’d love to just pick your brain on that before we sign off here.

Tom Kline | Better Vantage Point Consulting (20:34.616)

Yeah, so a couple things. Number one, as I mentioned, people were talking about data at a so to, I think data and customer data platforms, how they perform, how your data flows, what you’re spending money on. I think all of those things are going to be very, very prevalent in the next 24 months and after. But I think there’ll be a I think there will be a shift where dealers are able to take more control of their data and be able to use it more judiciously, where now the typical dealer has between, I’m gonna say 30 and 40 different vendors when it comes to their tech stack, which is unbelievable. It’s mind boggling. And how all that data flows or doesn’t flow, I think is gonna be very important. And kind of a corollary to that is making sure

If you don’t have cyber insurance, I would absolutely, for an actionable number two for today, I’d make sure that dealers, if you don’t have cyber insurance, look at that because with all of the data going all over the place, and if you don’t know where it’s going or how it’s going, your vulnerability is tremendous. Hackers are no longer living in their mother’s basement, right, they’re coming out of Iran, Iraq.

Russia, China, North Korea. These are very sophisticated attacks and they happen all the time. Dealers get into class actions on these data breaches and cost them millions of dollars. So taking control of your data and making sure you have backend coverage for that, I think is really where dealers need to make sure they’re focusing.

Ilana Shabtay (22:30.622)

Yeah, and I would just add to the point about cyber insurance. 100% invest in that, but in general, I think just being aware of how your data is being transferred when you are investing in other softwares and vendors. I mean, first of all, 30 to 40 is insane, but question that and hold your vendors accountable and make sure that they’re actually transferring data in a secure way because that, I agree with you, this is the focus for the next 12 months and you want the insurance and you want it there, but you also wanna be responsible for how your data is being transferred in the first place. So it’s a great point. I’m happy you brought it up because we, I haven’t really talked about it so much on this podcast and it’s something that we are gonna be focusing on. So Tom, thank you so much. Wealth of knowledge. I can’t even imagine what kind of conversations you’re having with dealers. But dealers, if you wanna find Tom, where could they find you?

Tom Kline | Better Vantage Point Consulting (23:20.896)

on the web under better vantage point dot com or you can reach out by cell answer my cell phone seven five seven four three four seven six five six i still answer myself but people still answer it right very responsible linkedin facebook uneasy to find

Ilana Shabtay (23:34.026)

very responsive on LinkedIn. So, Tom Klein. Amazing. Well, thank you so much, Tom, for joining us again. If you like this episode, tune in to Inside Auto Podcast. Thanks, Tom.

Tom Kline | Better Vantage Point Consulting (23:43.642)

My pleasure.

Tom Kline | Better Vantage Point Consulting (23:48.528)

Thank you.

Fill out this form to schedule a personalized demo today!

Get in touch!

    Thank you for your submission!

    We just need a few more details so we can personalize your demo.

      Solutions of interest:

      Sign up for our newsletter!

      We value privacy and would never spam you. We will only send you important updates about Fullpath.

        Fill out this form to schedule a personalized demo today!
        Get in Touch

          Thank you for submission!

          We just need a few more details so we can personalize your demo.

            Solutions of interest: