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from the scorn-the-poor-man-as-a-thief-in-country-and-in-towne dept.
Auto loans to borrowers considered subprime, those with credit scores at or below 640, have spiked in the last five years with roughly 25 percent of all new auto loans made last year subprime, a volume of $145 billion in the first three months of this year. Now the NYT reports that before they can drive off the lot, many subprime borrowers must have their car outfitted with a so-called starter interrupt device, which allows lenders to remotely disable the ignition. By simply clicking a mouse or tapping a smartphone, lenders retain the ultimate control. Borrowers must stay current with their payments, or lose access to their vehicle and a leading device maker, PassTime of Littleton, Colo., says its technology has reduced late payments to roughly 7 percent from nearly 29 percent. “The devices are reshaping the dynamics of auto lending by making timely payments as vital to driving a car as gasoline.”
Mary Bolender, who lives in Las Vegas, needed to get her daughter to an emergency room, but her 2005 Chrysler van would not start. Bolender was three days behind on her monthly car payment. Her lender remotely activated a device in her car’s dashboard that prevented her car from starting. Before she could get back on the road, she had to pay more than $389, money she did not have that morning in March. “I felt absolutely helpless,” said Bolender, a single mother who stopped working to care for her daughter. Some borrowers say their cars were disabled when they were only a few days behind on their payments, leaving them stranded in dangerous neighborhoods. Others said their cars were shut down while idling at stoplights. Some described how they could not take their children to school or to doctor’s appointments. One woman in Nevada said her car was shut down while she was driving on the freeway. Attorney Robert Swearingen says there's an old common law principle that a lender can’t “breach the peace” in a repossession. That means they can’t put a person in harm’s way. To Swearingen, that would mean “turning off a car in a bad neighborhood, or for a single female at night.”
(Score: 2) by Ken_g6 on Friday September 26 2014, @09:52PM
It sounds like there are two problems here. One, the borrowers may not be following the law regarding time to pay. And two, the devices don't clearly state when the car is potentially going to be disabled.
So I would have the devices clearly speak when a car payment is late. No whistling, no beeping, synthesized speech. In Missouri, for instance, one of TFAs says a letter is sent after 10 days, and repossession may occur after 30. So I would have it say the following, clearly and loudly, every time when starting and stopping the car:
Day 1: "Your car payment is 1 day late"
And likewise days 2-9.
Day 10: "Your car payment is 10 days late. Your car will be disabled in 20 days."
And likewise days 11-29.
Day 30: "Your car payment is 30 days late. Your car will be disabled tonight at midnight."
Day 31: "Your car payment is 31 days late. Your car has been disabled." (And it won't start.)
(Score: 2) by Nobuddy on Monday September 29 2014, @01:22PM
My son's unit was 15 days late. When the bill was due but not paid, it would flash constantly when the car was running, right in your line of sight. No way in hell they can claim they did not know the bill was not paid yet.
I never saw it, but he said it starts flashing faster the day before they disable it. And they explain all this when you buy the car.