Most sub Prime buyers have been in this position for some time realized their car buying experience is different from that of their more credit-worthy peers. Some due to circumstances beyond their control are experiencing the sub Prime process for the first time. These buyers still warrant respect. Despite credit woes, their dignity remains intact and they want to be treated fairly and professionally.

To give you an idea of just how Sub Prime can impact your business, this Past February versus the same month a year earlier saw purchasers with FICO scores below 550 shoot up 48.3 percent year-over-year.

In fact, analysts found that the trend toward lower FICO scores among used-car buyers resulted in an average of 561.3 in the opening days of April. The added  share of sub-670 credit score buyers increased to 46.9 percent from March's reading of 46.37 percent and the year-ago mark of 35.22 percent.

Subprime is the most profitable segment in the pre-owned vehicle segment for which you must be equipped to compete.

 

Go to Dealer Monthly for the Stats


Author Bill Cosgrove
DealerNet Services 

With the continually increasing popularity of social media websites like Facebook, Twitter, and LinkedIn, where members can be connected to friends, family members, co-workers, clients, and potential clients all by logging in to one account, it is understandable that companies and employers are concerned about the security of their trade secrets.  However, the distinction between what is part of an employee’s personal profile and what portion may belong to the employer is not an easy one to establish.  In the past few years, a number of lawsuits have been filed, by both employers and employees, alleging misappropriation of social media accounts under trade secret law.  However, a court or jury has yet to find at trial that a LinkedIn profile or a Twitter account contains protectable trade secrets capable of being quantified into recoverable damages.  This article summarizes a few of the recent cases involving social media and discusses some of the issues to consider when litigating these kinds of trade secret actions.

Recent Cases Alleging Misappropriation of Social Media

Christou, et al. v. Beatport, LLC, et al. was filed in December 2010 by Regas Christou, the owner of several nightclubs with national reputations as venues for electronic dance music. A former employee of Mr. Christou, Bradley Roulier, booked well-known DJs to perform at the clubs.  He also created, with financial and promotional support from Mr. Christou, Beatport, a popular online marketplace for electronic dance music.  After Mr. Roulier stopped working for Mr. Christou, he founded his own competing club.  Mr. Christou alleged that Mr. Roulier threatened DJs that their tracks would not be promoted on Beatport if they performed at Mr. Christou’s clubs.  In his cause of action for trade secret misappropriation, Mr. Christou alleged that Mr. Roulier and other defendants misappropriated the log-in information for his clubs’ profiles on MySpace, lists of friends and customers, and lists of cell phone numbers and email addresses for DJs, agents, and promoters.

On March 14, 2012, the court denied the defendants’ motion to dismiss the trade secrets causes of action.[1] The court first noted that whether the plaintiffs’ MySpace friends list was a trade secret was a question of fact.   After considering all the factors for determining trade secret status, the court then held that the plaintiffs had alleged sufficient facts to maintain their trade secret claim at the motion to dismiss stage.

On March 26, 2013, the plaintiffs dismissed their claims against Beatport due to an informal resolution and voluntarily dismissed the claims of all but the two clubs that featured electronic dance music.[2]  The case remained set for a jury trial beginning June 24, 2013.

Another lawsuit, PhoneDog v. Kravitz, filed in July 2011, involved the claims of PhoneDog, an interactive web resource that reviewed mobile products and services, against its former employee, Noah Kravitz.  While Mr. Kravitz worked as a product reviewer and video blogger for PhoneDog, he was given use of and maintained the Twitter account “@PhoneDog_Noah,” which generated approximately 17,000 Twitter followers during the course of Mr. Kravitz’ employment.  When his employment ended, PhoneDog requested that Mr. Kravitz surrender the Twitter account and Mr. Kravitz, in response, changed the account handle to “@noahkravitz” and continued to use the account.  In its complaint, PhoneDog alleged misappropriation of trade secrets, intentional and negligent interference with prospective economic advantage, and conversion.

On November 8, 2011, the court denied Mr. Kravitz’ motion to dismiss, finding that PhoneDog had sufficiently alleged a claim for misappropriation of trade secrets.[3]  Like the court in Christou v. Beatport, the court inPhone Dog v. Kravitz noted that to the extent that Mr. Kravitz challenged whether the password and account followers are trade secrets and whether Mr. Kravitz’s conduct constitutes misappropriation raised evidentiary issues more properly raised on a motion for summary judgment.  Id.  However, no motion for summary judgment was ever decided as the case settled on December 3, 2012 and Mr. Kravitz was allowed to keep both the Twitter account and its 17,000 followers.[4] 

One of the few trade secret lawsuits involving social media information that proceeded all the way through a bench trial is Eagle v. Morgan, a case brought by Linda Eagle, the co-founder of Edcomm, Inc., a banking education company that provided on-line and in-person services.  In May 2009, Dr. Eagle created a LinkedIn account with her Edcomm e-mail and used it for sales and marketing purposes.  However,  after her termination following the buyout of Edcomm by another company, Dr. Eagle’s LinkedIn password was changed and she was locked out of the account.  After Dr. Eagle filed suit in July 2011, alleging, inter alia,  unauthorized use of her name, misappropriation of name and publicity, identity theft, and conversion, Edcomm filed counterclaims for misappropriation, unfair competition, and conversion.

After a bench trial, the court entered judgment on March 12, 2013 for Dr. Eagle only on her claims for unauthorized use of name and invasion of privacy, finding that Edcomm used Dr. Eagle’s name without her consent for commercial purposes when it changed the content on Dr. Eagle’s LinkedIn page to provide information about Sandi Morgan, the interim CEO of Edcomm, even though the url still contained Dr. Eagle’s name.[5]  However, the court found that the evidence was insufficient to support Dr. Eagle’s request for damages and therefore did not award any compensatory damages to Dr. Eagle.

The court then entered judgment against Edcomm on its counterclaims for misappropriation, unfair competition, and conversion, finding that Edcomm never had a policy requiring that its employees use LinkedIn, did not dictate the precise contents of an employee’s LinkedIn account, and did not pay for its employees’ LinkedIn accounts. Edcomm also failed to put forth any evidence that Dr. Eagle’s contacts list was developed and built through the investment of Edcomm time and money rather than Dr. Eagle’s time and money.

The court’s description of the outcome in Eagle v. Morgan as a “somewhat mixed bag for both sides” highlights the importance of doing a cost-benefit analysis before making the decision to litigate over who owns a social media account.  While the primary lesson to be learned from these cases is that employers should have specific policies in place regarding personal and company social media, a secondary issue to consider is whether it is cost effective to litigate a trade secret case through trial, even if company policies purportedly establish ownership of social media accounts.  Because the issue of whether Twitter followers or LinkedIn connections is a trade secret is a question of fact, courts will not usually sustain a demurrer or grant a motion to dismiss on the ground that social media connections do not constitute trade secrets.  Thus, an employer or employee who files a complaint alleging trade secrets misappropriation should be prepared for the possibility of litigating the case at least through the summary judgment stage, if not through a jury or bench trial.  Further, because of the uncertainty of damages from a misappropriation, there is no guarantee that courts would even award damages because it would require the fact-finder to put a value on each friend, contact or follower.

Establishing a Company Policy Regarding Social Media that Best Effectuates Trade Secret Protection

In response to employers seeking guidance on social media issues, the National Labor Relations Board has issued multiple reports regarding the results of investigations in dozens of social media cases.  The third report, which can be found at http://www.nlrb.gov/node/5078, contains a sample media policy with general guidelines relating to posting content online as well as specific guidelines instructing employees, for example, not to register social media accounts using their work e-mail addresses.  While the sample media policy does not address all the factors discussed in Eagle v. Morgan (e.g. who pays for the account, who is responsible for the content), it provides a good starting point for employers seeking to establish ownership of social media accounts.  It is also a good idea to become more familiar with the options available to companies on social media websites, such as business pages and accounts on Facebook and LinkedIn.  When companies create separate social media accounts and allow their employees to post content and develop business on those accounts, they will not have to be concerned about the commingling of corporate trade secrets with personal social media posts and the possibility of misappropriation of those trade secrets after employees leave.

About the Authors
Ellen P. Liu is an associate at Sideman & Bancroft LLP.  Her primary practice areas include civil litigation and enforcement of intellectual property rights.  Constance J. Yu is a partner of Sideman & Bancroft LLP in San Francisco.  Her primary practice areas include civil litigation and business crimes defense.  Sideman & Bancroft LLP is a certified Women Owned Business Enterprise.  The firm is the largest women-owned provider of legal services in the Western United States, certified through National Association of Minority and Women Owned Law Firm (NAMWOLF) and Women’s Business Enterprise National Council (WBENC).


DealerNet Services

 

 

So are they going to close down the (OFT)? Apparently they are not doing a good enough job (Believe that and I have the car for you.)

 

This is a direct result of Big Government thinking they know how to control our lives better than we do.

 

I propose that we write a grant and get funding to set up our own regulatory agency the (GODB) GET OFF OUR DAMN BACKS! AND LET THE MARKETS DECIDED WHAT IS FAIR PRACTICE OR A GOOD PRODUCT.

 

Now they want to look at GAP Protection. What is wrong with GAP insurance anyway? It is a good product that provides value to the consumer and has been being sold for ever. No wonder our Government can’t get anything done or do it right when they do. I doubt if they even know how many agencies are out there wasting our hard earned tax dollars that we pay based on our income. Now they want to play with our income. Does anyone see anything ironic here?

Author Bill Cosgrove
http://dealernetservices.biz
 

 

 

 

FCA issues call for evidence on GAP competition

 

 

The Financial Conduct Authority (FCA) has begun a study into general insurance add-on products with an appeal for evidence of competition in the marketplace.

GAP (guaranteed asset protection) insurance sold by the motor industry is one product under scrutiny. Others include home emergency insurance, gadget, travel and personal accident cover.

The market study will consider evidence from companies and individuals and look at the nature of competition in these markets, in particular whether these products represent good value for money and whether consumers understand what they are getting with their policy.

The FCA’s call for evidence, to be submitted to FCAGIadd-on@fca.org.uk before September 10, reveals it will consider whether prices are excessive for a given quality, whether the quality is what consumers reasonably expect, any profitability differentiation between add-on and standalone sales for underwriters and distributors, and whether the consumer actively considers alternatives.

A key focus of the study is to investigate what impact add-ons have on consumer behaviour and expectations, how firms respond to those, and whether poor market outcomes arise as a result. 

Martin Wheatley, chief executive of the Financial Conduct Authority (FCA), told the Association of British Insurers (ABI) Biennial Conference: “Our new competition duty is the single most significant change in our objectives as a regulator. It means that we don’t just wait for problems before we try to promote competition in the markets we regulate.

“We have our first market study underway looking at general insurance add-ons.  We’ve called for evidence and approached a number of firms in the market for information. We are testing whether poor outcomes in add-on sales could reflect particular consumer behavioural traits and firms’ responses to them.”

“One of the questions I was most frequently asked 101 days ago was: ‘Is the FCA going to be genuinely different from the FSA?’.  We understand why people reserved judgement - the FSA needed to change.

“100 days later I think we are taking steps in the right direction. The FCA is in many areas a very different animal from the FSA.

“We’re not just asking: Is this product compliant? Does it tick every legal box? But actually: is the outcome good? Is the market competitive? And is fair treatment of consumers designed into products and culture?”

The results of the FCA's findings will be reported in 2014.  

 Author Tim Rose

 

 

 NEW FCA TO REGULATE CONSUMER CREDIT

 

The Office of Fair Trading (OFT) is facing calls from the Financial Services Consumer Panel to transfer control of consumer credit regulation to the new Financial Conduct Authority (FCA).

The Financial Services Consumer Panel says the FCA, who will succeed the Financial Services Authority (FSA) upon enactment of the Financial Services Bill, should be given full responsibility for the regulation of retail financial services, including consumer credit. 

The Panel believes that a two stage process is necessary starting with the FCA taking over responsibility for regulating credit under the Consumer Credit Act.  A second review would  further examine when it would be appropriate to move to an integrated Financial Services and Markets Act-based regime.

Adam Phillips, the FSA Consumer Panel’s chairman said :

“If the FCA is an effective consumer regulator, they would be able to intervene in the issues we have seen developing. A single regulator looking at all the conduct issues in financial services has to be a good idea.”

Gillian Guy, the Citizens Advice chief, said:

“It is vital . . . that not only lenders but also debt collectors, brokers, debt managers and retail lenders selling insurance products are regulated by a single body.”

Director general of the FLA Stephen Sklaroff said:

“Whether or not regulation transfers to the new FCA, the regime which the FCA will inheritin the deposit and savings markets is not appropriate for credit.”

A spokesman for Which? said :

“Key protections in the Consumer Credit Act must be maintained.”

A spokesman for the OFT said:

“The government needs to consider the evidence and determine whether and where change is needed. We are engaging with the government about what improvements we think would make a difference.”