The American Repossessor

We Need Brains, Not Brawn!
By Susan Marston

Well, if the world didn’t know how unprofessional the repossession industry can be, they certainly will get a lovely insight into it by the article that appears in the 15-21 November 2008 issue of the global business magazine the ‘Economist’ which is read in all continents of the world.  And what a dandy story that one is.  What a shame that the chance of having an opportunity to have some positive exposure in such a world renowned quality business magazine has been lost with the behavior that unfortunately typifies our industry.

I have been an avid reader of the Economist for many years and love it for the diversity of its content that really does stretch from continent to continent.

Upon reading the article titled “Snowbirds, meet the repo men”, (see attached article), which is predominantly about a repossession company called Gulf Coast Recovery in Cape Coral, Florida. I was dismayed at the message it presented to those that really don’t have any idea about us at all and to those that do, particularly many of our corporate clients.

If you  just take the  word ‘repo’, which has always posed a problem for me as it has unprofessional connotations associated to that word.  The word is repossession and needless to say, that is listed in the Thesaurus and not the shortened version!

I know that there are many of you out there that will not like what is written within the Economist article as I know many strive daily to ensure and maintain their professionalism and quality services to their clients .  Like it or not, we are all ‘tarred by the same brush’, no matter how professional we are, no matter how qualitative our services are.

Just those words…..”beefy….heavily tattooed” ….. are enough to bring to mind an image that not many of us want to see!

Quite frankly  I don’t care how big you are or how many tattoos you have, but when you are working you need to cover them up and when you are in your own time, who cares what you wear!  Come on company owners where is YOUR pride?  It is YOU who are at fault for allowing  your people to dress as they do and represent you.  The field agent is often the only point of physical contact that debtors, neighbors or even employers (POEs).  In fact, they  not only represent your company but they represent our clients – not exactly the professional image they had in mind.  A dress code is vital to ensure that your company is represented as it should be …and no I am not talking about suits and ties….I am talking about the basics of dress.

A professional image is necessary.

The description is bad enough, but what is wrong with these people that think it is fun to  repossess someone’s possessions (even though they really belong to the financial institutions) and make fun of that?  Where is their integrity?  Where is their compassion and understanding of leaving a fellow human being  with their dignity intact?  They should remember that…..’there by the grace of God go I!!!’   Perhaps the sun has shriveled up their brains.

And if that is not bad enough, now we an idiot field agent admitting that he ‘loves angry people’ and uses brass knuckles which are ‘very effective’.  What a sad state of affairs – I mean what company owner is comfortable with this kind of prehistoric Neanderthal representing their company? 

Oh it only gets better – NOT!  Now we have another selfish excuse for a human being that ‘ prays for a hurricane’ so that he can profit from many other peoples misery and even loss of life.  He should be put out of business!

What kind of people are these that have no consideration for others as long as they profit from other’s misfortune over and above the norm.  Of course we need our industry BUT there is a way to do business and a way not to do business.  Obviously these people have no idea what business ethics are.  I would never wish misfortune on anyone…but in this case, perhaps a dose of their own medicine just might curb their thirst for the misfortune of others!

We need ‘brains not brawn’ and the proof of that are the many repossession companies that do employ those that are contrary to those described within the Economist article.

When I look to recruit field agents, I don’t look for repossession experience.  Instead I want people that can communicate – verbally that is, have computer skills, able to organize and manage their time – we can train them to repossess OUR way and if they don’t like that, then they need to close the door on their way out!

YOU company owners are in charge of your own destiny, so stop putting your future in the hands of those  that have more brawn than brains!  Surround yourself with those that enhance your company, that will help you to change and move forward in a positive and profitable way.  But just make sure that it is not at the cost of the debtor’s dignity or YOUR integrity!

And here is the ‘cherry on the cake!’  It would seem that a hurricane is prayed for by some people that have absolutely no consideration or thought of others but themselves!  Well Mr Lento, I can only hope that you are granted your own private hurricane that whisks you and your truck away to the Land of Oz and perhaps you and the munchkins will live happily ever after.  Poor munchkins!

That is quite a sobering note to end the year upon, but it is reality.  I hope that as we continue to strive for a professional industry, that the ‘bad apples’ will fall, leaving those that really do believe in the future of a much loved profession.

2009 is just around the corner and in between we have a time of celebration that usually brings hope, understanding and thought.

Wishing you a Merry Christmas…

2008
By David Branch

With 2008 quickly coming to a close, I wanted to take a look at what the year has brought to the repossession industry and make some predictions for 2009. Without a doubt, the American economy has tanked this year and in just this last month, we have seen the Dow Jones stock index dip below 8000 for the first time in 5 years. In September, 81,312 homes were lost to foreclosure while 265,968 troubled borrowers received foreclosure filings. In October, 240,000 lost their jobs as the unemployment rate rose to 6.5% nationally. In the first half of the year, it seems that the trend of individuals are still buying cars that they cannot afford continued. Statistics show that some were spending 40% of their income on vehicle notes when even 20% can be too much on a depreciating asset. Low interest rates over the past few years made it easy for people to buy cars they ultimately couldn’t afford. Between 1998 and 2008, the total of Americans’ auto loan balances jumped from $282 billion to $772 billion.

Thomas Webb, chief economist at Manheim Consulting, a wholesale vehicle auction operator, says 1,505,000 vehicles were repossessed in 2007, a 10 percent increase over 2006. He predicts another 10 percent increase in repossessions during 2008, sending repo numbers to one of the highest levels in a decade. Wells Fargo reports it has also seen an increase in auto loan delinquencies and wrote off $1 billion in auto loans in 2007, an almost 17 percent increase over the $857 million in write-offs in 2006. An even higher write-off rate is expected to close out 2008. I have never been a big fan of statistics as they can be manipulated and twisted to suit any agenda, but there is no doubt that auto loan defaults are on the rise and that can only mean good news for us as a whole. Right?

In years past, once a debtor was in default, the order to repossess would fly off our fax machines. We knew which times of years were busy, adjusted for the slow times and watched for the signs of economic downturn, knowing that less money in the consumer’s pockets meant more money in ours. But much like the trend with home foreclosures, many lenders are now trying to avoid repossessing vehicles. Decades ago, this was a different business. We would knock on doors, make contact with the debtors and work as a liaison between the finance company and debtor, keeping the communication open between both parties and helping bring the loans current. This is where the term ‘Field Adjuster’ originated. I began my career as a field adjuster, but that title and it’s duties quickly gave way to the new title of ‘Repo Man’. Lenders stopped wanting any dialoge or promises and wanted their collateral repossessed as quickly as possible. Debtor contact became a last resort and the industry transformed in to the business we know today. However, with lenders receiving less and less return at auction while write-offs continue to climb, I see a return to the days of the field adjuster.

With an estimated 1.9 million repossessions expected to close out this year and an even higher number predicted for 2009, I see a good financial year ahead of us. According to the latest US Census statistics, there where 1,226 repossession agencies, with 7695 employees in 2000. That number declined in the next 5 years to 941 agencies and 5949 employees in 2005 and an annual payroll of $166,718,000. While I expect to see an increase in orders for repossession in 2009, I also predict an increase in the number of new agencies. Along that thought however, I recently saw someone post on a forum that he and his son had started a ‘repo company’ and was asking the following questions:

1. What goes on an "assignment" Sheet? We were asked for one of these from a Bank who is willing to give us business, but didn’t want to sound unknowledgeable (sic) by asking them?
2. Where can we get a quality vehicle inspection report to use?
3. What kinds and levels of insurance do we need? We know what the State minimums are for use of our tow truck. I have heard of lot insurance, tow truck insurance, on hook insurance? I have been given quotes from $300 to $1000 per month. Any suggestions on what company to use?
4. What fees to charge and to whom. I had a finance ompany (sic) tell me they are charged anywhere from $50 (no not a typo) to $350. They said some charge storage and some charge mileage. If we charge storage and mileage, what is the going rate? We have had a car lots say they are charged anywhere from $150 to $250. We want to make sure that we do not price ourselves out of the business.
5. In addition, we had a finance company ask if we sell the cars from oour (sic) lot or take them to an auction. this caught us by surpirse (sic). Any advise on this. If we sold them off our lot, would there be an additional fee to the finance company or part of the repo ree. If so what is reasonable. If we have to take them to an auction after storaging (sic) them for the minimum waiting period, do we charge an additional fee or is it included in the repo fee. If so what is reasonable.

With newcomers asking questions like that, I question the longevity of new companies. Without seeking consultants such as Susan Marston/ConnecTGo Inc, most new agencies will come and go. Established companies that implement action towards becoming a more service oriented agency and just not a recovery based service, should fare very well in the coming year. Lenders are going to expect more from us in 2009 and new fee schedules should be in order. Those agencies working for forwarder’s fee’s don’t have the ability or knowledge to revert from repo man to field adjuster and they will quickly fall by the wayside as well.

Wishing you a prosperous and happy New Year,