Julie A. Cardosi
EFFECTIVELY AND PROACTIVELY HANDLING CONSUMER COMPLAINTS AGAINST THE DEALERSHIP BUSINESS
Updated: May 13, 2021
Dealerships, in the course of daily business operations, may be familiar with the occasional consumer complaint they receive from the state attorney general’s office. These complaints may relate to the consumer’s vehicle purchase, to service of the consumer’s vehicle, or to some other aspect of the vehicle transaction, such as advertising. Most states and federal regulatory agencies that are charged with enforcing consumer and related laws, utilize programs that entail a dispute resolution process that starts with the filing of a complaint against the business. Illinois is no exception. For example, the Illinois Attorney General’s Consumer Protection Division is charged with enforcing Illinois laws intended to protect Illinois consumers against unfair and deceptive practices. To help accomplish its duties, the Attorney General’s office utilizes an informal dispute resolution process involving the filing by consumers of complaints. Such complaints may concern the sale and/or servicing of motor vehicles. While the Attorney General’s office does not represent citizens privately, often times, these consumer complaints can result in investigations and law enforcement actions by the state against those businesses whose practices are alleged to be unlawful.
These consumer complaints must be taken seriously by the businesses against whom they are lodged and they must be dealt with effectively. In some instances, the state issues subpoenas in connection with these complaints, involving production of evidence and ensuing enforcement litigation. As a result, dealership managers, executives and counsel may be required to expend considerable time and effort handling a consumer complaint. Sometimes, there may be several complaints relating to a singular specific dealership practice that must all be addressed. Poorly managed complaints can produce adverse results for a business, including litigation and associated legal fees and costs, as well as fines and penalties. So what are some ways dealerships may more effectively handle these complaints?
One way to effectively handle these complaints is to ensure that dealership personnel who deal with customers are well-trained. These dealership employees are the “first responders” who can proactively listen to the customer and attempt to respond and resolve the customer’s differences on the front end, whether in connection with a sale or service. These personnel should be required to have a basic knowledge and understanding of all applicable state and federal laws and regulations that are of impact. Dealership counsel should assist in educating dealership personnel through guidelines and best practices instruction. This can help prevent a customer’s concern from turning into a lawsuit or legal claim. Another effective approach is to emphasize effective listening and communication skills by dealership personnel to address the customer’s needs with the goal of preventing the necessity of filing a consumer complaint with regulatory agencies in the first place.
Dealership personnel can also assist with recognizing frivolous complaints. Some customers disguise their buyer’s remorse in the form of a consumer complaint seeking to get out of the deal or payments they realize they cannot afford. Still others may be instinctively litigious. By promptly addressing complaints at the outset, the dealership is better able to weed out insincere or harassing complaints. It is important that the complainant knows the dealership will vigorously defend itself against such complaints. On the other hand, reasonable complaints warrant careful attention with an eye towards resolution.
In some instances, especially where the customer’s concern involves a claim of product defect, the dealership should involve both the manufacturer and its insurance carrier. For example, if the dealership adhered to manufacturer policy or instruction in servicing a mechanical concern, depending on the agreements with the manufacturer and applicable law, the manufacturer may be required to indemnify and hold the dealer harmless from the customer’s claim. Some manufacturers require the dealer to notify them of the consumer complaint as a condition to indemnification. This may also extend to responsibility for the remedy and other relief.
Finally, dealerships should confer with legal counsel upon receipt of a consumer complaint filed with the regulatory agencies. This is especially true if the customer has retained an attorney. Even if not, however, counsel can assist in advising the dealership client as to an appropriate resolution to mitigate further exposure and liability, as well as prepare necessary legal release instruments in the event a settlement is achieved. By effectively and proactively handling consumer complaints, dealers can help avoid or, at least, reduce and mitigate the adverse consequences of consumer complaints to the dealership’s business, its reputation, time and other resources.