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The Remote Repo Man

As auto lenders reach out to those with poor credit, they are increasingly using starter interruption devices, technology that allows them to remotely disable a car, to spur timely payment.

Candice Smith: The worst thing ever to happen to someone is to be driving on a freeway, cars like going super fast and your car just instantly powers down VO: two years ago Candice Smith says she and a friend were driving on a busy stretch of Interstate-15 in Las Vegas when her car’s engine suddenly stopped. CS: I started to panic real bad and I looked over like this and was like “what’s going on?” VO: The reason her car stopped wasn’t a mechanical issue, she says it was her auto lender. The company, she says, determined that she was late with her payment and remotely turned off her car. CS: All of a sudden the steering wheel locks up. CS: it was super scary. I think if it wasn’t for the person who was in the car with me actually pushing the car over to the left hand side I think we would have been hit or probably dead. TITLE: The Remote Repo Man VO: As a growing number of auto lenders extend loans to those with poor or damaged credit they are increasingly turning to new technology called a “starter-interrupt device” to spur timely payment and rebuild credit with flashing lights, loud beeping and the threat of remotely disabling the car. David Sailors: there is a tough love approach with our technology. And whether it be a sub-prime lender, a bank, a credit union this is how they are approaching the consumer, is with that tough love. We want to help them get on their feet. But sometimes it requires a very consistent reminder and in some cases, the disablement of the vehicle. VO: David Sailors is the executive vice president of Lender Systems, one of a handful of companies making starter interrupt devices. His company did not manufacture the device in Ms. Smith’s car. DS: This is the noise that they would hear on the very last day of payment. Every five seconds the device is actually beeping at them. All the way taking the kids to school, to work, it’s informing them that they need to make their payment - contact their lender. However if they don’t, then the device at midnight, most lenders choose midnight as their time of shut-off, the device will not allow that car to start. VO: Mr. Sailors says there are no instances where Lender System’s devices have caused a car to shut down while driving. DS: There is no technology I’m aware of our there, other than what law enforcement is using for theft recovery, that would shut down a car while it is driving. Any of our competitors today would only use a technology that would shut down a car only where the vehicle would not restart, not while its in motion. VO: Other device manufacturers include Spireon and PassTime, Passtime instructional video: This device can help you keep track of your upcoming payments so that you can improve your credit history... VO: which made the device installed in Ms. Smith’s used car. CS: They told me that if I missed a payment that the car would turn off in like a day. VO: PassTime says THAT THE COMPANY HAS NO RECOGNITION OF ITS DEVICES SHUTTING OFF A CUSTOMER’s CAR WHILE DRIVING. CS: They told us that the car has to be at a complete stop. Like the car had to be someplace for a couple of hours before the car was turned off. VO: Passtime dispute’s Ms. Smith’s account, which she shared with Nevada lawmakers at a hearing last year. Others, like Mary Bolender, say they have had to carefully arrange driving around payments. Mary Bolender: You do not have a grace period after the first day when your payment is due, in three days they shut your car off. VO: That’s a violation of Nevada state law, says Sophia Medina, Ms. Bolender’s lawyer. Sophia Medina: In the case of the retail installment sales contract, the contract that’s required by statute when you buy a car, it defines default as anything 30 days past the day of the payment being due. In the case of the starter-interruption devices they have a welcome letter that they send out and it says if you’re two days late we’re going to turn off your car. VO: Most lenders allow for 24-hour emergency grace periods even if payment is late. MB: Ok this is the little remote that you use. And when you have your emergencies you have to hit “9” six times and then it’ll go bleeble.... and then it’ll start up. MB: It’s like they control my life. Doesn’t matter if an emergency happens. My daughter got really sick I had no way of taking her to the doctor So for them to control it and for someone to have control over my life it feels... just absolutely helpless. VO: critics say that the largely unregulated devices can be a threat to public safety and need to be reined in. SM: One of the avenues that we’re possibly looking at is a consumer class action case that would prevent the finance companies from turning off the vehicle prior to the 30 day default period that’s currently in Nevada statute. VO: In late 2012 Ms. Medina REACHED A CONFIDENTIAL SETTLEMENT WITH Ms. Smith’s LENDER. Today she drives a different car. She says she paid for it with cash. CS: I would never get another car that has a GPS system or a pastime device in it again... under any circumstances unless they were agreed to take the GPS system off.

Business

The Remote Repo Man

Sean Patrick Farrell September 24, 2014

As auto lenders reach out to those with poor credit, they are increasingly using starter interruption devices, technology that allows them to remotely disable a car, to spur timely payment.

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