The American Repossessor

DAYTONA BEACH, Fla. — To the professionals in the repossession industry — and yes there are hundreds of them in this business — there’s nothing funny or entertaining about Operation Repo, so-called “reality TV.”  Although it slips by pretty quickly in the credits, it has a disclaimer up front that the scenes are staged, coyly referring to them as “reenactments.”

This show has introduced an element of danger into the repossession process that previously did not exist. It has placed the notion in the minds of a consumer that a repossession agent can physically assault you, and the consumer will take actions (self-defensive in their thinking) to prevent that from happening. Also it furthers the misconception that recovery agents — many of whom are actually former bankers, military or law-enforcement officers — are knuckle-dragging thugs sent by the creditor to rough up the debtor.

However, there is a segment of the industry that is unlicensed and untrained, and a segment that some say is totally out of control.

“What we have now is vigilante repossession run amok,” noted Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a nonprofit organization that advocates for consumer safety and against auto fraud and abuse.

“States need to adopt laws to rein in the violence, kidnapping and lawlessness,” Shahan added.

The National Consumer Law Center, a nonprofit organization seeking to protect consumer rights, recently published a paper called “Repo Madness: How Automobile Repossession Endanger Owners, Agents and the Public.” In this lengthy publication, the group documents a number of violent and sometimes lethal acts that occurred in the course of recent repossessions.

Besides shutting down the process of self-help repossession altogether, one of alternate recommendations of the NCLC was the “strict licensing and bonding requirements for any private individual who carry out repossessions.”

That’s a great idea; it really is.

In a recent article by Art Christensen included in Repo & Recovery, he too advocates this as a method of controlling rogue repossessors.

But getting a state to enact a law to govern anything is a slow and tedious process often with mixed results. Add to this ponderous process lobbyists representing everything from the banking industry to national buy-here, pay-here organizations, and what you’ll see is that getting meaningful legislation on the books could take a long, long time.

Some states won’t do it at all. In the four states where there is some sort of licensing for the repossession process, meaningful enforcement of these laws has proven to be spotty at best.

What is at the bottom of this issue is the creditor’s demand for the lowest possible repossession fees, which often can only be offered by inexperienced, untrained, improperly equipped recovery agencies. Worse yet, some creditors assign accounts on a “contingent” basis — no car, no fee — which lures unprofessional agencies, and allows the creditor to assign accounts to a number of competing agencies.

This process has proven to create a “Wild West” free-for-all on the streets, which has led to a number of documented deaths, most notably being Donna Lee Morris, legal representative of Tommy Dean Morris.

What can be done? Creditors need to get back to the best practice of seeking out and using the best possible recovery agent.

Ask the question: Is the recovery agency licensed in their state? Are they part of a national trade association that offers ongoing “continuing education?” Do they have adequate experience?

If the creditors would take these simple steps in basic due diligence, it would avoid most of the problems documented in NCLC’s “Repo Madness.”

Even if the creditors were to use a forwarder — outsourcing the repossession accounts through a third party — they need to make sure they are using a forwarder who is actually immersed in the repossession industry, not some disconnected entity that sees this simply as a profit center.

We understand that repossession is the most invasive collection practice allowed in the United States today. For the most part, when handled by experienced professionals, it is a low-risk, drama-free process that bears no resemblance to reality TV.

But the truth is the field of Operation Repo agencies have been sown and grown by the creditors themselves by using vetting practices that says price is the main criteria. It’s up to the creditors themselves to change their mindset as to who to use in this practice, either using the most professional agency possible or the cheapest. Using one of the other has its own predictable outcome.

Patrick Altes is the owner of Falcon International, one of the nation’s oldest and largest independently owned repossession agencies.