RV Dealer Online Sales & Delivery Considerations

Over the past month, RV dealers have dramatically changed their business practices due to state and local orders. These directives have closed non-essential retail businesses and instructed those that believe their operations are essential—such as RV sales and service--to conduct business using health precautions such as social distancing, disinfecting, and hygienic mask-wearing.

According to Ward’s AutoWorld, 24 states allow dealership sales operations to remain open, and 23 other states allow only online, by-appointment, or remote sales. On top of these are hundreds of other local restrictions. There are full sales bans in Hawaii, Kentucky and, to a lesser extent, New York. RV dealers should consult their lawyers and professional advisors about state and local laws.

Although most U.S. citizens are under some form of stay-at-home restriction, there are still RV dealers willing to sell RVs and customers who want to buy them. Online sales negotiations may be conducted through email, video conferences, phone calls, texts, or online chats. The paperwork is provided online, and most transaction documents are executed online electronically. In most states, remote sales and delivery are permissible if the dealership has a physical location that meets state licensing requirements and the salesperson conducting the online sale is licensed under state law.

Some RV dealers have conducted online sales for over a decade, while others have conducted few if any. However, there are some issues they should be aware of in this changed environment to avoid running into trouble with regulators, customers, and fraudsters. Please check with your attorney--some states don't allow sales to occur away from the dealership or outside the dealership’s county.

FTC’s Cooling-Off Rule

The FTC's Cooling-Off Rule gives consumers a three-day right to cancel a sale made at their home, workplace, or at a seller's temporary location, like a convention center or fairground. It also applies when a consumer invites a salesperson to make a presentation in their home. The rule was intended to prevent high-pressure salespeople from taking advantage of consumers and should not apply to RV sales conducted online with the unit being delivered to the customer’s residence. FTC guidance indicates that getting signatures from consumers at their home for a previously negotiated transaction doesn’t trigger the rule.

As the guidance states, “If the delivery driver’s only function is to obtain the buyer’s signature on a fully completed contract that contains terms that have been negotiated before the delivery occurred, then the act of obtaining the buyer’s signature at the buyer’s residence would not constitute an act of solicitation that would trigger rule coverage.”

It’s very important that the person delivering an RV bought online refrain from upselling ancillary products and services or from trying to negotiate trade-in values, etc. All price negotiations should have already occurred and been included in the sales contract. The delivery should simply be an opportunity for the customer and dealership representative to finish signing the paperwork while practicing social distancing. In fact, it may be best that salespeople not make the deliveries, since their presence could imply that this was still part of the sales process and not simply a delivery.

Salespeople Working Off-Premises

Dealers should make sure that their salespeople working from home are complying with dealership, state, and federal policies when contacting potential customers. All of the laws that govern a business’s ability to contact consumers from the showroom apply to when salespeople do it from home.

The federal Telephone Consumer Protection Act (TCPA) is designed to safeguard consumer privacy. It restricts telemarketing communications via voice calls, SMS texts, and fax. The TCPA restricts telephone solicitations (i.e. telemarketing) and the use of automated phone equipment. It also limits the use of pre-recorded messages, automatic dialing, and SMS texts and fax use.

Without explicit customer consent, companies must adhere to strict solicitation rules, salespeople must honor the National Do Not Call Registry, and subscribers on the registry may sue a company that disobeys the TCPA guidelines. Consumer consent is an essential defense under the TCPA and should be a primary focus of any business that communicates with consumers and customers via telephone. Text messaging potential customers by salespeople without prior consent is a primary concern for RV dealerships.

Likewise, salespeople must be careful that they are not receiving personal information from customers on their personal phones or home computers. Any personal identification information must be treated in as secure a manner as would be required at the dealership.

Identity Thieves are Taking Advantage of Covid-19 Disruptions

The Covid-19 pandemic has provided the perfect storm for identity thieves to take advantage of people adjusting to new business processes. Currently, there are many frauds surrounding vehicle financing, bank applications for federal PPP relief, tax fraud, and email and phishing scams. The FTC has released many warnings over the past several weeks, and you should be paying attention.

With online negotiations and RV deliveries to your customers, it’s imperative that your dealership follow Red Flags Rule policies to ensure that the person financing and taking delivery of the unit is who they claim to be. In most cases, if your dealership falls prey to an identity thief, it is a recourse loan and the dealership will end up paying for that mistake. Your dealership must confirm the individual’s identity – even if they’re wearing a mask!

This information is provided as guidance only and is not intended as legal advice. Dealers should consult their lawyers for details about state or local laws and your specific situation.