A growing number of consignors are reaching out to their auction partners asking them to update their service agreements to include the deletion of Nonpublic Personal Information (NPI) left in the electronic systems of vehicles. Some auctions are reluctant to launch the service out of legal and operational concerns given the huge variability of vehicle systems. Others are introducing manual processes attempting to quickly please their customers, possibly without realizing their exposure. All parties seem to agree that they must act to protect consumers who unwittingly leave behind a trail of potentially damaging personal information in repossessed, off-lease, rental, and trade-in vehicles.
"The issue of vehicles showing up at auctions while still containing the personal data of consumers is a major concern for our consignor and auction partners.” said Keely Smith, Director of Business Services at AutoIMS and Co-Chair of the IARA Compliance Committee. “With more consignors requiring the deletion of this data, we wanted to help establish a common process and provide visibility for this vital, new remarketing step.”
Consignors increasingly understand that leaving their customers’ NPI in the vehicle systems (home address, garage codes, previous destinations, text messages, phone identifiers, etc.) may expose them to expensive lawsuits and fines, amounting to thousands of dollars per VIN. Furthermore, OEMs are currently spending $25 million in an ad campaign in Massachusetts: one such ad says car data could lead to a home invasion; another one depicts a young woman being assaulted in a dark garage. Consequently, auctions should not be surprised that the number of requests to remove NPI from the vehicles in their remarketing portfolio is going to rapidly increase – hence needs to be thoughtfully addressed.
Some entities have begun using photos to “prove” deletion, though have since realized this makes an incomplete-by-design compliance record. Few vehicles have a confirmation screen, and invariably they ended up with missing, blurred, inconsistent, or no photo to take at all (e.g. in cars requiring voice commands). Auctions in particular should recognize how often inspectors miss a ding or a scratch. While that may not be a big deal, missing just one step in a deletion sequence may leave some NPI behind, resulting in non-compliance. It is unlikely that consignors will indemnify auctions, yet predictable, measurable outcomes with strong compliance records are valuable to consignors. NAAA members who adopt best practices may be able to satisfy customer requests without taking on undue risk and may also find that a data deletion service can become a profitable add-on to their service offerings.
As a result of consignors’ collaboration, a new solution was introduced to help the industry with this critical new compliance step. Privacy4Cars and AutoIMS announced a new integration to tie all parties and data together and create the needed compliance log in the process.
Matt Arias, who co-chairs the Standards Committee at the National Auto Auction Association (NAAA) and at IARA remarked, "Being able to consistently, efficiently, and effectively help our consignors by leveraging Privacy4Cars will be that much more convenient with the AutoIMS integration. I can't imagine an auction not using this solution." Americas Auto Auction, where Arias is the AVP of Operations, recently announced a partnership with Privacy4Cars and is the first major chain to offer consignors an extended warranty on their data deletion service to further limit their legal exposure from possible fines and lawsuits.