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posted by on Friday February 24 2017, @06:17PM   Printer-friendly
from the you-just-can't-replace-Harry-Dean-Stanton dept.

The US Federal Trade Commission is investigating an auto lender that often requires subprime borrowers to have so-called GPS starter-interrupter devices enabled on purchased vehicles. The so-called kill switches, which can monitor a vehicle's constant whereabouts, also have the remote ability to shut a car off and to prevent a car from starting. This makes it easy for lenders to repossess the car for missed payments. But this modern-day version of the repo-man raises both safety and privacy concerns.

The Credit Acceptance Corp. of Michigan said in a Securities and Exchange Commission filing this month that it received a civil investigative demand from the FTC "seeking information on the Company's policies, practices and procedures in allowing car dealers to use GPS Starter Interrupters on consumer vehicles. We are cooperating with the inquiry and cannot predict the eventual scope, duration or outcome at this time. As a result, we are unable to estimate the reasonably possible loss or range of reasonably possible loss arising from this investigation."

The lender did not immediately respond for comment. There are more than two million of these devices affixed to vehicles on US roads. They are often hidden, and they are required for car buyers with not-so-rosy credit scores as a condition of acquiring a car loan.

The FTC isn't commenting on the probe, which may include other lenders. The investigation likely centers on whether buyers are given adequate notice that the vehicles they are purchasing can track their every move and whether this is an acceptable business practice.

Source: ArsTechnica


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  • (Score: 5, Interesting) by sjames on Friday February 24 2017, @07:45PM

    by sjames (2882) on Friday February 24 2017, @07:45PM (#471290) Journal

    According to Forbes [forbes.com], it is at least alleged in court that some cars have been shut off while in motion. Since it is possible to have the device only signal location once the car is disabled, it seems that the dealer has no legitimate interest in the car's realtime location beyond that.

    I have seen elsewhere claims that the devices are sometimes activated even when payments are up to date. It's also not at all hard to forsee a situation where suddenly finding your car inoperable could present a risk, even to life.

    The Forbes article at least alluded to an additional issue. Other car loans typically offer a much longer grace period to get a missed payment taken care of and certainly don't suddenly make it impossible to even go get your paycheck so you can pay the installment.

    Some contract terms are simply not permitted. It is reasonable for the FTC to consider recommending limitations on the remote disablers as well as getting an opinion on any existing laws that may be violated.

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