Finding Your Repo Agents in Craigslist? Really?

A recent article on CU Collector, a website dedicated to the auto-loan collector within America's credit unions reported that a national repossession "forwarding company" was trying to find new repossession agents on Craigslist. 

Don't get me wrong. I use Craigslist all the time to list things for sale (surfboards, guitars, etc) and find handy-man assistance for home work projects. I like Craigslist. Craigslist is and of itself isn't immoral, and really, neither is "forwarding", per se. 

But one has to ask themselves why someone would need to turn to this generic online bulletin board to find professionals in what is very specialized niche service?  Aren't there already good repossessors working already? 

This all seems like a lot of effort made  to bypass 500-600 repossessors that are already licensed, bonded, equipped, certified, and insured, that are on the streets already, and can be easily found in the pages of ARA, TFA. AFA, NFA, or some other reliable source. Why source "qualified newcomers" when experienced professionals exist?  

The answer is price.  

If any forwarder were willing to pay a fair rate for legitimate services rendered.....investigation fees, storage, skip tracing, difficult repossessions....they would find allies in the professional segment of the repossession world. 

Its not forwarders, really, that professional repossessors are pushing back against...its assignments being put out for unrealistically low fees, no close fees, no storage.  And its only the "newcomers" haven't done the math to realize that their business model is not sustainable for the long haul.  

And, are "newcomers" who creditors need out there representing them in the most invasive collection practice allowed in America? Read NCLC's "Repo Madness" if you need an answer to that question. 

Creditors are ultimately responsible for the injuries, deaths, or damages that could occur (and have occurred)  in the repossession process. That's a fact, proven time and time again in the courts. Creditors need to have already qualified, already experienced people in the consumer's driveway at 2:00am, not a newcomer!  And, like it or not, the greatest concentration of experienced repossessors are in the trade groups....and most of them have been in business long enough to know the foolishness of offering unrealistically cheap prices for their valuable services. 

Its too bad.  At the end of the day, its all about price, not experience, or even concern for consumer safety. All this effort to save, what., $100 an account? To safely recover more of the creditors $10,000 vehicles? 

Its not Craigslist that's the problem. Its an unwillingness to use the trained, professional agents that exist already, and that unwillingness is simply driven by price alone. 

That's what is too bad about this. 

The Myth of the Voluntary Repossession

The Myth of Voluntary Repossession

Every culture has its myths.  There’s a new show on TV called “Finding Bigfoot” which is getting a lot of press. And, we just went through Christmas, a time when the mythical Santa Claus is paraded around as a legitimate being.  Some myths are pretty persistent.

A persistent myth in our culture...the world of auto repossessions...is that of the existence of “voluntary repossession” (or at least the belief that they are significantly easier than a self-help repossession). The reality is that the chances of finding the easy, should-be-done-cheaper voluntary is as difficult to find as Sasquatch.

Let me hit you with a Debbie Downer moment; several of the recent repossession-related deaths that have been documented in the press lately were on “voluntaries”.  And other deaths have occurred when the repossession had supposedly transitioned from being confrontational to the customer appearing to become cooperative (a recent situation in Florida, the customer went in to get cardboard boxes to get his property out of the car, and then came out of the house with guns blazing.The repossessor was killed). 

Why is that?

Well, first off, many of the accounts assigned to repossession agents as voluntaries never should have been assigned as such. The phone conversation in which the debtor yells at the collector “yeah, go ahead and send your #$%& repo guy out tomorrow and I’ll be waiting for him!” gets lost in translation, and becomes “please go to the address tomorrow, our customer promises to meet agent there with the car”.  All to save maybe $100.00 on the repossession fees?  This is more common than you could ever imagine.  

Also, it puts the customer more in control of the time, place, and manner of surrender. Since its based on the customer’s cooperation, there’s the possibility of no-shows (commonplace) and re-scheduling. The customer can force the repossession to happen at a time when he and his buddies have knocked back a case of brewskis, and they are all sitting around waiting for the arrival of the recovery agent.  

But its bad for the lender, too.  With a voluntary, we often find the car sitting on junkyard wheels and tires, or with a hole in the dash and doors where the stereo was…situations the client could have controlled if handled after the car was safely in possession of the agent. The $100 savings in repossession fees translated into a $1000 hit on the car’s residual value.


You might like to think that voluntary repossessions are friendly exchanges, like old friends meeting over coffee. Those do exist, but they are a rarity. Ask your repossessor; I am sure they will tell you.

There might be some internal reporting benefit to the creditor to consider an account a “voluntary” , but the potential costs to their repossessor or even their own collateral seems far too high, in my book. 

Repossessing A "Spot Delivery" Deal

We occasionally get a panic call from a local new-car dealer, asking if we help them with a emergency repossession account.

It usually goes like this...customer came rolling in the dealership in their rusted out Lebaron, and after dancing with the salesman,  drives off in a new Chrysler 300, thinking they have a deal.  


However the dealership can’t get the deal run through any financing entity.....customer fibbed about actually having a job, let's say. And in the meantime, the dealership might have complicated the situation by selling (or junking) the customers LeBaron.  Ouch!


The dealership calls the customer and asks...and then demands.... he/she bring the car back, because the financing fell through.  Of course, Mr New Car Owner says “no”....a deal is a deal.  Plus they've been showing off the new ride to the neighborhood. 


So the dealership is calling us, the recovery agent, to insert ourselves in this super tense situation (often with verbal threats having been thrown around from either side), to repossess the new car "sold".....and now "unsold" on this “spot delivery”.

Well, the Federal Trade Commission is holding a series of round tables to surface information about abusive lending and collection practices, and on Nov 17th, they were advised by a leading consumer-advocate attorney that this is a practice that needed to be shut down.

Time to Crack Down on Conditional Car Loans, FTC Is Told
"Yo-yo" loans are prevalent enough to warrant new consumer protection rules
ConsumerAffairs.com


It's time for the Federal Trade Commission (FTC) to crack down on abuses of conditional car loans, consumer advocates testified at a recent Washington hearing.

"In no other area of our commerce can someone sign on the dotted line, deliver the product, and then cancel the transaction and insist on the product being returned because the final credit transaction did not produce the hoped-for income," said Ian Lyngklip, a Southfield, Mich., attorney.

"It's like I walked into a supermarket, purchased an apple, walked outside and took a bite only to have a clerk run into the parking lot and insist the apple be returned," Lyngklip said.

The practice of issuing conditional loans, known as spot delivery or yo-yo loans in the car industry, is prevalent enough and harmful enough to warrant FTC protective regulations and enforcement action, Lyngklip said.

"It is unconscionable that a dealer would sell a car and then, because the final credit terms are unfavorable, send the repo man out to repossess the car and refuse to give back the down payment or reimburse for payments made," added Lyngklip.

A spot delivery, or yo-yo sale, happens when the car dealer sells the consumer a vehicle and completes all the steps necessary to sell the car including executing a contract of sale, signing title, taking a down payment and turning over the keys.

After the transaction is finished, the dealer calls the consumer back claiming the deal has fallen through. In some instances the dealer uses fraudulent means or forcible repossession to take the car back.

The FTC Roundtable was entitled "The Road Ahead: Selling, Financing & Leasing Motor Vehicles." Lyngklip was one of five experts participating in a panel which discussed "Which Practices, If Any, Cause Significant Harm to Consumers, And What Are Potential Solutions."




We don't like losing business, but on this one, we have to agree. The customer is told its a "done deal" when they roll out.  We know the dealership is anxious to get the customer behind the wheel, have him start smelling the new leather and start jamming to the Bose sound system....but it seems like a dicey proposition for all involved...including the repossessor, when a deal is forcefully "unwound" on a consumer. 


Just sayin'. 

Portrait of a Good Repo Client

I've focused a bit on what's gone wrong with how some auto lenders are treating the repossession industry. But its not universally true....there are some good clients out there.


What does a good client look like? At least from the perspective of a repossession agency? 


A good repo client gives you information.  Lots of it.  
How many cars are sitting at the "address provided"? Only a fraction of what there used to be. So it's often what's being untold that is resulting in missed repo opportunities. The creditor might know why the debtor is in our area ("he's looking for work...he's a plumber"....or "he's down here with girlfriend"...or "he's really into bowling...").  There a million little factoids that might be useful for an intelligent investigator to use in his hometown to find more information about the debtor. Cars are often repossessed from locations we surface, and it takes data (even seemingly unrelated data) to do that.  Even knowing the vehicle's color or tag is huge. It's in your best interest to tell the repo agency everything you know about the debtor. 


A good repo client treats our staff well. 
Man, I know it would be frustrating being a collector for an auto lender. Customers lying to you all day, upper management pressing for better numbers, a minefield of legal issues to navigate with every collection call.  It would be tough.  But we appreciate it when a collector sets all that aside and relates to our staff as being "on the same side", because we really are. People in the repo business really do go to the wall for a client they appreciate.  That means more cars recovered, and less loans pushed into charge-off.  Think of the repossessors as your football team, and you, Mr. Client, as the coach. It takes positive motivation and team spirit to get your agents ready to hit the streets.


A good repo client pays a fair fee. 
I am repeating myself from previous posts.  But...paying a reasonable repo fee means that the agency really will give each repo deal their best efforts. Its that simple. 
Trust me......you don't want to be the client whose accounts get worked "only when we're in the area". Priority accounts receive better attention, and clients that pay fairly get prioritized. 
Also paying a close fees justifies the agency's investment in Accurint reports, or running Carfax's, or even paying to get a tag number to input into their own ALPR systems...on a no-repo-no-fee basis, agencies will quit spending on those accounts knowing that's only more money out the window.  You will get more cars from agencies that you pay a close fee, and more of the same if you allow your agent to charge a skip fee on a legitimate find. 


A good repo client says "thanks".

I know its not your own personal car that we've recovered. But when you sense we've gone the extra mile, and kept hammering away on an account by checking the address a million times, or recovered the car from some other address we surfaced, please feel free to say "thank you".  Good will and appreciation pays dividends in any relationship, even business relationships. 


Its not all about the money, although that's a part of it.  And I'm not saying a good relationship with your repossessor will make or break your organization. But it will make a difference...a huge difference.....in your organization's bottom line.  But even more importantly, this has to do with cooperation and respect....which are good ways to interact with people no matter what activity you're engaged in.

Mayhem Is Everywhere!

Most TV commercials suck, really. But you got to admit that the latest rounds of Allstate Insurance commercials are incredibly funny. Click on this one to see if you agree: 

   They make a great point...."mayhem is everywhere!" Mr Mayhem proclaims in one commercial.  And in this clip he snarls: "If you named your own price for auto insurance, you could be paying for this yourself!"  You gotta laugh at how smug and irritating this guy is. 

But its a perfect case in point for the repossession business. Can you think of any line of work that has such a potential for mayhem? I can't.  

Mix big heavy cars with bigger and heavier tow trucks. Toss in a few angry customers and financially-desperate repossessors. Throw in some alcohol and a few handguns (somethings with the customer or, worse yet, with the repo agent!)  Stir together under a lot of pressure, generally in the middle of the night. That's a recipe for mayhem. 

When price becomes the sole criteria (or even the MAIN criteria) for a service like ours, and you ignore every other factor, you do encourage mayhem. 

This could simply sound like a plea for higher repo fees. It's not.  

We all nod in agreement when someone says "you get what you pay for!" So its true in the repo business, too:  to get good, intelligent people  to do this job using good equipment, with lots of training and lots of insurance, it takes more money than what some of the too-big-to-fail banks want to pay. And the result has been "accidents" like this in which consumers or repossessors have shot each other, run over each other, rammed each other, or committed various other acts of "mayhem".  

Several lawsuits from all of this are winding their way through the court systems right now. In 2011, lenders will pay out tens of millions of dollars for death or injury claims over repossessions, the majority of which involved repossessions handled on a no-recovery-no-fee basis. The two go hand in hand, and its getting scary.  

And in most cases, unnecessary. 

Horrible Bosses

There's a movie out right now called Horrible Bosses.  I haven't seen it but it looks like it would be pretty funny.


I have, however, worked for horrible bosses over the years.


When they were rude or greedy or unfair, did I give them my best work? Would I ever get the Employee-Of-The-Month parking spot working for one of those kinds of bosses?  Heck no.


I needed a job so I could put gas in my car so I could get to the beach that afternoon.  I would swipe hamburgers (I worked at McDonalds) or surf wax (I worked at a surf shop). You get the picture. Horrible bosses create horrible employees, and although I am reformed now, I was a bad employee working for bad bosses.


A report came out today, the results of a survey of a cross section of the repossession agencies across America done by CU Collector, an independent credit union organization.


Around 72% of repossession agencies reported that they do work for forwarders (the majority of which forward under a no-repo/no fee basis). That is a surprising number. However of these same agencies, only about 22% report that this is a satisfactory arrangement. 


So in other words, MOST of the agencies that work for these cheap-o contingent forwarders think their bosses suck.  Horrible bosses, really.

When you don't like your client (hey, it happens) or they don't pay for extra effort, then guess what? Their assignments make their way to the bottom of your clipboard.


No extra trips to the house when diesel fuel is bumping $4.00 a gallon.


No need to run database searches for new info...its just going to come out of your pocket if you don't get the car....


And, why knock on a door to determine where the debtor DID go, since you're not going to be paid for the "close" anyway?


I know us repo guys aren't rocket scientists, but humans are human.  If we think our bosses are being greedy or unfair, we (as an industry) simply don't perform well...and the numbers bear this out.


We are hearing that forwarder's recovery ratios are 20-40% less than what would be consider industry standards. Nationwide that amounts to billions of dollars in lost cars, simply because too-big-to-fail creditors are using too-cheap-to-be-fair forwarders.   


The repossession industry can and does work hard, and can pull good solid numbers for clients they like. And the clients they like play fair, pay reasonable fees, and reward extra effort. 


Good bosses bring the best out of their people.  And horrible bosses get the results they deserve. 

Stupid Stuff Clients Ask Us To Do

Note that I said "stupid stuff".  There are no stupid clients; they only ask us to do stupid stuff at times. Well, pretty frequently actually.


Don't get me wrong, we love our clients. They help us put fuel in our trucks. But it does surprise me some of the things that people ask us to do...people that I would normally think were way smarter than me, a graduate of the local community college and now repo guy.


So here's some of the stupid things clients ask us to do:


1. Can You Follow the Debtor in Traffic?  Dude, you've been watch too many old Miami VIce reruns. It would requested for situations where the car is in a parking garage or gated community, and the client wants us to park at the entrance and then follow the debtor's vehicle through traffic and repo it while the guy is in Starbucks getting his Caramel Macchiato.  Have you ever tried to keep on someone's rear bumper through traffic, even driving  a normal car? Its crazy dangerous.  Try it in a tow truck.  And, by the way,  don't you think the debtor is going to see a stealthy black Ford F450 Superduty with a tow lift, belching diesel exhaust in his rearview mirror?  ("Hmm...wonder what THAT guy is up to?"). Oh, and no one is willing to pay for the extra hours to even try this.  Bad idea.

2.) Can You Pay A Neighbor To Snitch on The Debtor?  Okay, check it out.  We're in the debtor's driveway with our tow truck, and debtor isn't home. We stroll over to Joe, the nosey next-door neighbor. "Hey, we'll pay you $50 to call us when the car...er...the debtor shows up".  Joe looks at us, looks at the tow truck, looks at us again. We're obviously the repo guy, effectively violating the customer's right to privacy. We might as well have erected a billboard in the debtor's yard:  "Repo Man Missed You...We'll Be Back!". Next thing you know we'll be federal court defending ourselves against any number of laws that guard the debtor's right to privacy regarding debt.


3.) We have GPS on The Debtor's Vehicle. Will You Work Cheaper? Listen, last time I heard, these were the rules of the repo game: Mr Client, you give me the best possible address you can give me, and I'll do my darnedest to get your car. Your side of the deal is to tell me what you know to begin with...it's your car you want back, right? Also, the car having GPS doesn't turn bullets into marshmallows...its still a repo deal, with the possible hassles and dangers associated with that.

4.) Debtor Has Two (or more) Cars That Need To Be Repossessed. Can I Get a Deal?  I shop at Publix, which is a gorcery chain here in the Southeast. I love Publix. They even will carry your groceries to the car if you want them to. But the coolest thing about Publix is their "Buy One, Get One" deals they have every week. Deodorant, almonds, paper plates....you can get all these kinds of Buy One, Get One deals. Makes me feel like I am making money just walking in the door of the place. But the problem is, those things are commodities. Its not much extra effort for General Mills to push out an extra box of Lucky Charms. But that's not true with repossessions.  Two at a time is actually MORE than twice as hard. We often have to check an address a bazillion time before we spot the car there. Should we send two trucks around each run? And what happens if we just take ONE? The other car enters the witness protection program. So doing a multi-car deal is more like planning a strategic strike on an Al-Qaeda compound than a stroll down the aisles of Publix. 


In case your keeping score, the right answer to each of the above would be "no". We're trying to keep ourselves out of the hospital, out of jail, and out of bankruptcy.