SoylentNews is people
SoylentNews
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
(Score: 2) by urza9814 on Friday February 24 2017, @10:49PM
If I buy a car, there is no way in HELL I'm taking a loan from the dealer. That's just *asking* to get ripped off. So I get a loan from my credit union and buy the car. So who would you say owns that car? The dealer, even though they've been paid in full? Or the credit union, even though they've never touched or even seen the thing -- and in this case, when they don't even operate in the state where the vehicle was sold and used?
It seems that you are not very clear on the concepts of lending and ownership. When you take out a loan and buy a car, the car is paid for. The loan is not. The car may be collateral for the loan, or something else could be, but that's not really relevant. You still own the car. What they own (at best) is a contract where you've agreed to give the car back if you can't pay.
Now, what's the difference between them owning the car and them owning a contract where you have to give the car back? One means criminal charges, the other means a civil contract dispute. It's illegal to put someone in prison in the US solely for owing money, but it's certainly not illegal to imprison someone for stealing a car. So it's a VERY important distinction. People who intentionally attempt to pervert this distinction are trying to change the very definition of the law in order to allow them to punish customers for their own mistakes. Loans require interest payments precisely because there is some risk that the money won't be repaid. If they consistently give loans to people who can't pay them back, it's their own fault when the loans default and the lender goes under.
As for "How will these poor people get cars if they can't be exploited by auto lenders?" -- Well, if these companies intend to recover the car, then it isn't a sale but a RENTAL. Or maybe a lease. So that's the business these lenders actually want to be in, but I suspect they've found it more profitable to outright lie about their business model instead. Because who is going to take a rental when the big company with all their financial knowledge lies to you and says their fancy analysis shows that you CAN actually afford to buy one?