One of the most important things to remember when ordering a repo is to make sure that your repo agents are well trained and that they know the law pertaining to repossessions in your state. Just because you know how to operate a tow truck does not mean you are qualified to be a repo agent. Untrained personnel can get creditors into real trouble, real fast by breaking the law and violating people’s right to privacy.
A few months ago I became aware of a repo that went bad in an affluent community in Massachusetts that has landed a name-brand national bank squarely in a whole lot of hot water. The vehicle to be repossessed had a mechanic’s lien on it for nonpayment of body work performed on it. The registered owner had no money to pay the bill after the body work had been done and stopped making his car payments as well. The vehicle went up for repossession.
The bank hired a repo agent who had their repossession agents go to the shop and demand surrender of this vehicle to them. The owner of the shop told him that he had a mechanic’s lien on the vehicle and that his bill for the body work would have to be paid before he would release the vehicle to anyone. The bank refused to pay the bill.
The owner of the body shop moved the vehicle from his shop to his home because he felt that the repo agents would try to steal it. The repo agents figured that that shop owner may have stored the vehicle at his home so they simply searched property records and found out where he lived. The body shop owner’s home had a driveway that was approximately 100 feet long, and the property had a fence and gate that locked at the end of the driveway. There were also security cameras on the property to monitor vehicles driving into the driveway and people coming to the door.
The repo agents went to the home address of the body shop owner at around 2 a.m. and spotted the vehicle they were looking for all the way back at the end of the driveway and parked next to the garage. Now here’s where the story really gets good!
The repo agents picked the lock on the gate, which was caught on the surveillance camera that happened to be focused right on them, and then drove their truck up the driveway. The repo agents then hooked onto the vehicle from the rear and dragged it down the driveway leaving skid marks the full length of the driveway, again caught on camera. The next door neighbor was a retired Boston police officer who was awakened by the noise, and came outside and sat on his porch to watch the action while he had a cigarette.
The next morning, the body shop owner found the vehicle missing from his property and called the police to report it stolen. The police told him that the repossession company reported that they had recovered a vehicle at his address in the early morning hours. When the police viewed the scene with the tire marks and the security gate, they knew that the agent had broken the law. You cannot pick locks to gain access to people’s property to recover a vehicle. The body shop owner immediately contacted his attorney who filed a lawsuit against the repo agent and the bank who gave them the assignment.
The bank ordered the repo agent to return the vehicle to the body shop owner, which they did immediately. Subsequently they found out that the transmission had been damaged when the vehicle had been dragged down the driveway.
Later that day, the two repo agents returned to the body shop owner’s property and began taking pictures of the skid marks and of the cameras mounted on the house. The police were called and both agents were arrested for criminal trespass. The repossession company had reached an out of court settlement of $125,000, which had to be paid within four weeks. They defaulted on that payment and now will be going back to court. The bank has not reached a settlement and will be going to court as well.
A Hold Harmless agreement really does not insulate the bank for misdeeds that a repo agent may do, even though it states that it shall. A court may view it as the bank failed to hire a reputable repossession company to do their work and find against them. The body shop owner has asked for a jury to hear this case.
We will keep you updated on the outcome of this case, which is a classic example of a repossession gone bad.
About This Site.We are dedicated to providing the Collateral Recovery, Debt Collection, and Equipment Leasing and Finance communities with a steady flow of up-to-date news, stories, and free resources. The site is published by Richard Henderson, President of EquipmentEngine, LLC. Mr. Henderson is an equipment finance industry veteran with a vision to transform the portfolio services and repossession industries.
About EquipmentEngine, LLC. EquipmentEngine is a full-service Asset Management Solutions company founded in early 2010 to simplify the business of managing a nationwide commercial repossession and recovery effort. EquipmentEngine leverages Six Sigma processes, 21st century technology, and over 200 storage facilities across the country to deliver cost effective and consistent equipment management services for our clients. EquipmentEngine is headquartered in Portsmouth, NH.
Photo credit to Mattox at http://www.sxc.hu/photo/1192535