The Remote Repo Man: Auto Dealers Using Remote Kill Switches – Legal?


The Remote Repo Man



We’d mentioned the concept of kill switches in cars several years; the placement of these payment assurance devices (PADs) in autos by  dealerships on leased vehicles and by rental car companies on their vehicles.

We question if these devices are even legal.  The courts have largely remained hands off on the legality of the PADs and for the most part, state authorities have deemed these devices legal if certain safeguards are met and the borrowers agree to the activation of the unit’s tracking aspect.

Below are news articles representative of the consumer’s point of view on the matter, that of auto dealers and lastly, recently proposed legislation to halt the practice as it may be illegal, considering the potential danger to the driver should his vehicle just stop while he is driving (as has happened to unaware lessees).

From the consumer’s perspective: 

The Remote Repo Man

(NYT, 16 Sep 2014)

The thermometer showed a 103.5-degree fever, and her 10-year-old’s asthma was flaring up. Mary Bolender, who lives in Las Vegas, needed to get her daughter to an emergency room, but her 2005 Chrysler van would not start.

The cause was not a mechanical problem — it was her lender.

Ms. Bolender was three days behind on her monthly car payment. Her lender, C.A.G. Acceptance of Mesa, Ariz., remotely activated a device in her car’s dashboard that prevented her car from starting. Before she could get back on the road, she had to pay more than $389, money she did not have that morning in March.

“I felt absolutely helpless,” said Ms. Bolender, a single mother who stopped working to care for her daughter. More. 

According to the lender:

Car lenders use remote kill switch to disable vehicles when borrowers miss payments

(  26 Sep 2014)

A device that allows car lenders to remotely shut down vehicles is becoming an increasingly popular safeguard against subprime borrowers behind on payments, despite some labeling it as a “Big Brother” practice.

One of the device’s biggest fans is Lionel M. Vead Jr., who drinks out of a coffee cup that reads “The GPS Man” as he monitors the movements of roughly 880 subprime borrowers on a computerized map. As head of collections at First Castle Federal Credit Union in Covington, Louisiana, Vead told The New York Times that he can spot drivers who are behind on their payments and, with a simple click of a button, remotely disable their vehicles on his computer or cell phone.

“It gets their attention,” Vead said to the Times.

Vead, who’s been a debt collect for nearly 20 years, no longer has to hire a repo man to track down delinquent borrowers–a practice that sometimes took years. Instead the delinquent borrowers come to him when they discover that their car won’t start.  More.


Proposed legislation to protect the consumer:

Related Update:

( 16 Feb 2015)

If you’re finding those payments harder to make or you got your kid a cheap set of wheels from a street-corner used car dealer with the understanding Junior would make the payments, you might want to know about a proposed law in New Jersey that would “prohibit the installation of payment assurance devices as a condition of securing motor vehicle funding.”

What’s a payment assurance device? I didn’t have any idea either until I checked out the internet and found more than I really cared to know about ways self-described sub-prime lenders make certain you continue paying for the car you lease or buy. Payment assurance devices seem to be growing in popularity, as more than two million vehicles across the country already are equipped with them.

They are small pieces of technology that allow the dealer to track and remotely disable your car if you’re even one day late in making a payment. If you have one, you know it’s there. Most of them require the driver to enter a code provided by the dealer each month after making a payment. If payment hasn’t been received or you forget to enter the code, the device will prevent you from starting the car. Then the GPS part of the device allows the repo man to pick it up without confronting you.

Assemblymen Paul Moriarty and Angel Fuentes, both D-Camden, introduced A4033 to make the devices illegal in New Jersey.  More.

We’re certainly professionally curious to see where legislation goes on these payment assurance devices and will update our readers with developments.  In a future edition of The Beacon Bulletin, we’ll also explore the use of these kill-switch devices by law enforcement.

BNI Operatives: Info savvy; situationally aware.

As always, stay safe.



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