Illegal Repos Rise

More news is coming out regarding the recent uptick in illegal vehicle repossessions. As Fox 5 in Atlanta reports:

The Consumer Financial Protection Bureau has issued a bulletin. It says the Bureau has seen a rise in illegal seizure of cars, sloppy record keeping, in turn unreliable balance statements, and ransom for personal property left in those vehicles. The CFPB writes that the current market conditions mean cars are being repossessed too quickly leaving families in dire straights. A sudden, unexpected car loss means lost wages when work is missed, or losing a job altogether, not to mention a wrecked credit report.

Let’s break it down. The government posted that servicers are repossessing vehicles where sufficient payment was made to stop the repossession. Servicers are failing to cancel repossession orders, in turn this leads to unreliable balances. It’s a domino effect. This means car owners think they’ve paid enough to hold off repossession when in fact they haven’t. Then to add salt to the wound, the personal property found in the car is behind held ransom until loan fees are paid off. And that’s illegal.

The report brings up several problems — improper records, failure to stop improper repos, and improperly withholding personal property. The last one is a problem even if the lender has a right to repo the car. They still have to give back personal property.

The story also acknowledges some of the problems having a car repo’ed can cause like missing work, negative credit reporting, and the lack of having the use of the personal property.