GPS Payment Assurance devices have been failing in record numbers

PORTLAND, Ore. - March 17, 2015 - PRLog -- Portland, OR.  Al Brown hooks up the Chevrolet Suburban to his tow truck without even getting out of the cab.  Today’s modern repo man (they prefer to be called collateral recovery agents) seems to have technology on their sides.  Their trucks can lift and tow away a vehicle at the push of a button.  They have laptops and wi fi internet in their trucks as well, but lately technology has thrown a curve ball at both the repossession companies and the banks who use them.

The Suburban that Brown just recovered was supposed to be an easy repo for the auto lender.  The vehicle had a GPS tracking device installed, so that the lender could easily locate and repossess the vehicle if the borrower defaulted.  These devices, often referred to as “payment assurance devices” or “starter interrupt devices” have become very common in the sub-prime auto finance industry.  They work like this: a device is wired into the vehicles wiring harness by a professional mechanic.  The device is a GPS tracker that uses the same positioning software as a smart phone (cell phone towers are used to locate the exact position of the vehicle).  The lender can send a signal to the device to locate it in real time or to tell the device to shut off the vehicles starter, leaving the vehicle inoperable.  The borrower then usually calls their lender, makes a payment, and the system is remotely reset.  If no payment is made the lender can then locate the vehicle and send the repo man to recover the collateral.

These devices have been around for approximately 15 years now, however, they were very expensive until recently.  Now a lender can usually get one installed and activated for under a few hundred dollars, much cheaper than paying a team of repossession agents and skip tracers to find and locate the vehicle.  Several manufactures make the devices, and most cater to the sub-prime auto lenders and used car dealerships that offer “buy-here pay-here” or “in-house financing”.  Many of these lenders believe that finding the vehicle if the borrower defaults will be simple, thus saving them the expense of a difficult repossession assignment.

“False sense of security,” says Brown, a repo man employed by Portland Auto Recovery in Portland, OR.  “This is the fifth one this week that has had the GPS disabled by either the debtor or it just malfunctioned”.  Apparently, the borrowers are becoming savvy at disabling the starter interrupt devices.  “Lenders call and say that they need our help, they know the vehicle was last reported in our area, but they have no clue where it is because the GPS no longer works,” Brown says.  “Some don’t even have a credit application or reference sheet for the borrower” added Vicki Purcy, a Skip Tracer at Portland Auto Recovery.  “It’s just crazy that they have a vehicle worth 10, 20, maybe even 50 thousand dollars and have no idea who is driving it or where it may be.”

Portland Auto Recovery has had to resort to old school detective and investigation skills in order to successfully locate and recover these vehicles.  “It’s not easy at all,” says Brown, “I’ve spent a lot of time talking to people, tracking down old acquaintances of the borrowers, just looking for anyone who may be able to help me find these vehicles.”  Brown says his best trick is to offer cash for information.  “If I find someone that may know where the person or vehicle is, I find it really helpful to offer $20, sometimes $50 or $100 for them to tell me where I can get the car, cash money talks out here”.  The employees of Portland Auto Recovery also have an extensive network of neighborhood contacts and sources of information, something many of their local competitors do not.  “My employees are people persons first, they talk to people respectfully and try and find solutions so that we can get our client’s collateral back” says Portland Auto Recovery operations supervisor Gary White.  “We are in the recovery business after all, we are not a towing company that just picks up cars like some repossession agencies these days”.

White recommends that lenders often test the units in their collateral by sending a locating “ping” at least once a month to verify the unit is functioning.  Many never test the unit until there is a loan default, and by that time the unit may not be functioning.  Also, if you are a lender using a payment assurance device make sure you still get a complete credit application and reference sheet from your customer.  “It will say you a lot of time and money if you have to repossess it” says Brown.  “We can still find them and make vehicles appear out of thin air, but it takes time and resources”.

Portland Auto Recovery is a repossession agency based in Portland, OR.  The cover Oregon and Washington states.