Tag Archive | "James Ganther"

Lawn Mowers, Kill Switches and the Future of Compliance


The easiest way to predict the future accurately is to wait until it happens and be the first to announce it. This is aided, in part, by the fact that homo sapiens, as a species, don’t have an impressive track record when it comes to learning from the past. This means that history tends to repeat itself. So to predict the future of compliance, I will first discuss the history of lawn mowers and product liability.

Mind the Blades

Lawn mowers are pretty simple devices. All you need is a sharp blade and a way to make it move at a rate high enough to cut grass. In the beginning, lawn mowers got their power from the people operating them. Push mowers connected curved blades to the drive wheels and presto! — neatly mown lawns.

Then came power mowers. Whether walk-behind or riders, they incorporated gasoline engines and rotary blades. The combination was much more powerful, much more effective, and much more dangerous.

The increased danger led to injuries, lots of them, and most of them horrific. Until the 1960s, the law did not favor plaintiffs in this area. The law of negligence was not much help, as the duty of due care was usually breached by the victim or a close family member. And product liability law didn’t help, as the product generally worked just fine as designed and built — it was that very fact that made the injury possible. What was a plaintiff’s lawyer to do?

Then came the Restatement (2nd) of Torts in 1965. The Restatements of the Law are published by the American Law Institute as a general summary of the common law to guide judges. For those of you who didn’t go to law school, there are two broad areas of law: statutory law, meaning written laws passed by the appropriate legislature, and common law, meaning the interpretations of law by judges. In case of a tie, statutory law is supposed to win. But it’s the common law-creating judges who determine what constitutes a tie. So while the restatements aren’t themselves binding precedent, they are considered very, very persuasive.

Restatement (2nd) of Torts brought about a revolution that transformed products liability law. In section 402A, the Restatement offered up a new principle: Manufacturers could be held liable for unsafe aspects of their products if a means of preventing that unsafe aspect was available and not unreasonably expensive. This meant that Toro, say, could be held liable for a perfectly well-made lawn mower if an inexpensive kill switch was not incorporated into the design.

This notion became known as the “risk-benefit test.” The crucial question was whether the risks of a particular design were outweighed by its benefits. Courts considered “the likelihood that the product will cause injury, the gravity of the danger posed, and the mechanical and economic feasibility of an improved design.”

So every time your lawn mower turns off when you let go of the kill switch beneath the push bar or get off the seat or a rider, or if the blade disengages when you put the rider in reverse (No Mow In Reverse — “NMIR” — is a thing), think of the Restatement (2nd) Torts. Lawn care is safer because of it.

Injury Potential

All of which brings us back to the future of F&I compliance. Consider the state of products liability jurisprudence and substitute “service” for “product.” Let us assume that a consumer can be injured in the process of financing a vehicle, and that the monetary injury can be severe. Is it possible for players in the finance process to prevent such injuries?

At first blush, the answer would seem to be “No.” Deceptive practices can be perpetrated when there is no method of recording:

  • What was said to a customer and when?
  • What was the basis for quoted payments?
  • There was no leg in the payment quoted.
  • No variance in APR was attributable to race or other impermissible reasons.
  • The final pencil information flowed seamlessly into the menu presentation.
  • The initial and final payments through the menu process were accurate.
  • The deal terms reflected at the end of the menu presentation flows into the buyer’s order.
  • The information on the buyer’s order is reflected in the retail installment sale contract.
  • The product prices on the RISC match those on the product contracts.

And at second blush, the answer would still seem to be “No.” After all, dealers may have a desking tool provided by one vendor, a menu system from a different vendor, and a third-party DMS. None of those functions talk to the others.

But what if there was a system that tracked and recorded every step of the vehicle finance process? What if every representation made to a customer was recorded and time-stamped? What if all the math had to add up? The injury from deceptive practices could be drastically reduced, or eliminated altogether.

In fact, such a system does exist and is already on the market (and no, I am not an employee, agent, or investor). And if one company can do it, others can as well. The state of the art proves that transparency can be dramatically enhanced and fraud drastically reduced. A court’s analysis could move on to consideration of the risks of noncompliant systems versus the benefits of maintaining such a system. Any bets on how a court would come down on that question?

So what is the future? It’s the present: using existing technologies to make fraud nearly impossible. All that remains is for a court (I’m guessing in California) to decide that what can be done to protect consumers must be done.

The providers and administrators that make that technology available first will not just profit in the future, they’ll help create it.

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Randy Henrick Joins Mosaic Compliance Services


TAMPA, Fla. — Attorney and compliance expert William Randolph “Randy” Henrick has joined Mosaic Compliance Services LLC as vice president and compliance counsel, the company announced.

Mosaic’s cofounder and president, attorney James S. “Jim” Ganther, said he expects “great things” from Henrick, who joins the company with more than 20 years of experience in the consumer finance, compliance, bank regulatory and privacy and data security segments.

“Randy’s résumé speaks for itself, but it falls short of mentioning that he is, without question, one of the nation’s foremost compliance attorneys,” Ganther said. “We are extremely pleased to welcome him to the Mosaic family, and his presence has already begun to pay dividends for the company and our clients.”

Henrick most recently served as associate general counsel for Dealertrack Inc., where he authored 11 editions of the Dealertrack Compliance Guide. A prolific writer and speaker, Henrick has contributed to a number of industry publications and events, chaired the New York State Bar Association’s Consumer Financial Services Committee, and served as a panelist at an auto finance panel convened by the Federal Trade Commission, among other honors.

“I wanted to join Mosaic because they are an industry leader in making compliance training and compliant aftermarket product selling training available to dealers of all types,” Henrick said. “I look forward to working with dealers and providers to find and help them address the growing number of legal and regulatory issues they face and, by doing so, helping them be more successful in their businesses.”

Mosaic Compliance Services offers compliance and training tools to automobile, RV, motorcycle and marine dealerships. To learn more, visit Mosaic-Compliance.com.

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Ganther Leads First Wave of Compliance Summit Speakers


TAMPA, Fla. — Leading attorney and compliance expert James S. Ganther has agreed to speak at the upcoming Compliance Summit Las Vegas, organizers announced Tuesday. The event is scheduled for Aug. 29–30, 2016, at Paris Las Vegas, as part of Industry Summit.

“I’ve been privileged to have participated in each of the Compliance Summits since the initiative was launched in Miami in 2014,” Ganther said. “Each one has been better than the last, so I know the Las Vegas version will be a winner!”

Ganther will serve as the featured speaker for the Your Responsibilities portion of the event’s agenda, which will also include featured presentations and panel discussions dedicated to Rules and Regulations and Easy-to-Implement Processes and Controls.

As with past events, the educational sessions will be capped by “Is It Compliant?,” an open forum among Compliance Summit speakers and attendees. Unlike past events, Compliance Summit Las Vegas will continue with a comprehensive review session followed by an opportunity for attendees to sit for an exam to earn Certified Automotive Compliance Specialist status. Attendees are also invited to take part in the rest of Industry Summit, which also includes two full days of sales and F&I training.

“In words and deeds, Jim Ganther has been a stalwart advocate of front-end compliance and supporter of Compliance Summit,” said David Gesualdo, show chair and publisher of Auto Dealer Today and F&I and Showroom. “We are honored to have him back.”

Registration for Compliance Summit Las Vegas is open at the event’s website. Attendees who register by July 29 will enjoy a $100 discount. For more information about Compliance Summit, including sponsorship and exhibition opportunities, contact David Gesualdo via email hidden; JavaScript is required or at 727-947-4027.

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‘Is It Compliant?’ to Cap Midwest Compliance Summit


CHICAGO — Organizers of Compliance Summit have announced that the Midwest event, which will be held April 20–21, 2015, at the DoubleTree Chicago O’Hare in Rosemont, Ill., will conclude with “Is It Compliant?”, an open-forum discussion of the topics raised in the course of the conference.

“Is It Compliant? proved to be the perfect capstone for our inaugural event in Florida,” said David Gesualdo, show chair and publisher of Auto Dealer Monthly and F&I and Showroom magazines. “Engaging the speakers in an open, friendly environment will provide a last chance for every attendee to make their voice heard and fill in any gaps that may have appeared in the sessions that precede it.”

The discussion will be led by Bob Harkins, director of the AFG Training Academy and the event’s master of ceremonies. He will be joined by featured speakers and panel moderators from prior sessions, including attorneys James Ganther and Terry O’Loughlin of Mosaic Compliance Services and Reynolds and Reynolds, respectively, as well as AFIP’s David Robertson and World Class Dealer Services’ Michael Tuno.

More information about Compliance Summit, including registration and travel information, is available at ComplianceSummit.com. For sponsorship and exhibition opportunities, contact Eric Gesualdo via email hidden; JavaScript is required or call 727-612-8826.

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