On the last day of May, the Federal Trade Commission acknowledged it received a petition to regulate spot deliveries by dealerships and auto finance companies.

The experts at Ignite Consulting Partners offered their reaction to this effort championed by six consumer advocates.

“The practice of spot delivery has been a hot-button issue for consumer advocates for quite some time,” Ignite said in a recent Tip of the Week message to the industry. “In several instances, it has led to dealerships attempting to modify the terms of a signed retail installment contract due to changes in the underlying financial approval. In response to these controversies, several states have taken steps to mitigate, or even eradicate, this practice by implementing new laws or regulations.”

Ignite emphasized that its team is monitoring the issue closely since the FTC is seeking public comment about the matter until the end of this month.

“In the meantime, it is crucial to consider how this might impact your specific business model,” Ignite said. “We’ve encountered situations where buy-here, pay here dealers use forms that either contradict the retail installment sales contract (RISC) or potentially expose the dealership to a deceptive acts and practices lawsuit.

“Furthermore, we’ve observed dealerships conducting spot deliveries in circumstances that seem puzzling, considering the dealership’s control over the finance process and eventual ownership of the paper,” the firm continued.

Ignite added one more point about spot deliveries.

“For those operating within the independent dealer space, it’s essential to understand your state regulator’s perspective on the issue, whether there are any applicable laws, and whether any litigation activity has arisen concerning the issue,” Ignite said.

For operators who have more questions, Ignite can be reached at info@ignitecp.com or (817) 928-4303.