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Section 23

Unlawful Dealer Activities

23.13 "Bird Dog Fees"

  1. 1. "Bird dogs" are people that the dealer pays to refer customers to the dealer. Simply put, referral fees are illegal. The dealer cannot pay people who are not licensed as salespersons or dealers to refer customers to the dealer, or to otherwise negotiate any part of a sales transaction.
  2. Unlawful Acts:
    1. a. Employing or compensating any unlicensed salespersons (or "bird dogs"). [V.C. §11713(h)]
    2. b. Inducing a person to enter into a contract by offering a rebate, commission, or other compensation contingent upon the buyer referring another potential buyer to the dealer. [C.C. §2982.1]
  3. Incentives:
    1. Be careful. Do not offer your current buyer any money, or other financial incentive, to refer friends, relatives, or others. Doing so makes them a "bird dog." It is okay to ask for referrals, just don't offer money for them.

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