TruCar Must Eliminate Bird Dog Spiff Business Model In Virginia

Bird Dog Payments For New Car Leads illegal in Virginia

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WASHINGTON, DC - January 12, 2012: The AIADA Newsletter reported that TrueCar will Adopt Subscription Fees in Virginia in Bid for Regulators' OK according to the publication Automotive News.

TrueCar's announcement was the latest development in a growing regulatory controversy affecting auto dealers in half a dozen states. On Tuesday, regulators in Oklahoma asked TrueCar to suspend business there until legal concerns could be addressed. In a statement, TrueCar said it complied, suspending service in Oklahoma through Jan. 15, "as we transition to a new model."

TrueCar also suspended service in Nebraska for the same period. In Virginia, TrueCar said it will drop fees that it charges participating dealers when they sell autos from TrueCar leads. The regulators ruled Monday that the fees violate Virginia's ban on bird-dogging - paying fees to third parties for leads that turn into sales. Instead, TrueCar will charge participating dealers a subscription fee not tied to sales.

In the TrueCar statement, CEO Scott Painter said: "TrueCar is committed to never putting our dealer partners at risk, which means we will always work closely with regulators to identify a workable solution or suspend service."

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