By Myril Shaw
While the times and circumstances require social distancing and limited direct, face-to-face interactions, and while dealers have clearly developed great virtual/no-touch showrooms and selling techniques, one aspect of consummating the sale has not changed for boat dealers.
When a customer wants to finance, the compliance requirements (Red Flag and Patriot Act laws) have not been reduced in any way.
Also, while there may be a few exceptions with some local lenders, none of the national or major regional marine lenders will accept e-signatures on loan documents. This combined reality certainly makes virtual selling a challenge.
There are seven things that dealers offering financing can do to make the process as easy as possible in the COVID 19 world.
1) Ensure that all the information on the credit application is correct. Let customers know that some lenders are now doing employment verification calls, and many are requiring proof of income. If your customers know this in advance and are prepared, it will speed up the process and will be the first step in eliminating any potential fraud.
2) Do use an e-signature on your online Credit Application. This will require the customer to self-certify that the information on the Credit Application is accurate and that they are who they say they are.
3) Make sure that your Credit Bureau pulls have Red Flag and OFAC checks turned on. All the bureaus have the capability to check if, based on the name, address, and social security number of the customer, that customer is triggering Red Flags or is on any of the US Government restricted lists. This is also a good time to ask the customer to send you a picture of their Driver's License to facilitate remote deliveries.
4) Once you have confirmed that the customer wants to proceed with a financed purchase, do your own OFAC check. This is easy and takes just a matter of seconds. Go to the government OFAC site at https://sanctionssearch.ofac.treas.gov/ and just enter the name and address of the customer. Capture a screenshot of the result.
5) After you have settled on all the terms of the sale with the customer, including the contract rate and term, the total amount to be financed and the protective products included in the sale, provide them with a complete checklist of the items that will be needed at delivery. These items will be, at a minimum: the complete down payment (or balance thereof), an insurance binder with lender listed as the Lienholder, their Driver's License (or government-issued ID if they do not have a Driver's License).
6) At the time of delivery, do the following:
a. Always maintain a safe social distance.
b. Ask the customer to place their Driver's License at the place where you will be asking them to sign documents and to then step back.
c. Ensure that the Contracts and other Closing Documents clearly highlight where signatures and initials are needed.
d. Take the Driver's License and place the documents in its place.
e. Examine the Driver's License (if you have not previously received a picture of the Driver's License, take a copy or a picture at this time – all lenders require a copy of the Driver's License) and make sure that it does not appear altered and that the picture looks like the customer (as well as Driver's License photos can).
f. From a safe distance, help the customer walk through and sign the documents.
g. Once signed, retrieve the documents and return the Driver's License.
h. If the lender requires a signed Patriot Act document, you are now able to execute that document because you have seen the customer and the Driver's License at the same time.
7) Most lenders, but not all, will take faxed documents. Some require originals to follow – and some of those that have required the originals to follow are waiving that for now. Fax the documents to the lenders who take faxes. Copy the documents. If required place the documents in an 8 ½" by 12" envelope and then place that in your UPS, USPS, or Fed Ex envelope and get them sent to the lender.
The reality is that this is mostly just good finance, contract, and delivery practice. The lack of e-signature recognition by the lenders is a minor inconvenience. Delivery of the boat still must occur and using this procedure ensures that compliance occurs while still practicing social distancing.
Myril Shaw is the COO of Dealer Profit Services. He may be contacted at firstname.lastname@example.org