People with subprime auto loans are finding that their lender will remotely disable their vehicles if they fall behind on payments. As a condition of obtaining a loan, many subprime borrowers must agree to have a starter-interrupt device installed on their vehicles. The devices also incorporate GPS technology so lenders can track a vehicle's location and movement.
Michael Corkery and Jessica Silver-Greenberg in the New York Times report that the devices have been installed in about 2 million vehicles. They write, “Now used in about one-quarter of subprime auto loans nationwide, the devices are reshaping the dynamics of auto lending by making timely payments as vital to driving a car as gasoline.”
Not surprisingly, borrowers have complaints. They say their cars have been disabled when they are on the way to emergency medical appointments, that the vehicles have been disabled when they are only a few days late, and that their vehicles have been shut down while driving on a highway. (This last situation is not supposed to happen; the devices are not supposed to be able to shut down a car—only prevent it from starting.)
Privacy is also a concern. Corkery and Silver-Greenberg write that one lender tracked a woman to a shelter to which she had fled from her abusive husband. More prosaically, a lender can determine whether a borrower is continuing to commute to work.
Borrowers are fighting back with the help of videos that show how to disable the device. Lenders are responding with decoy devices that do-it-yourselfers can think they are disabling while the real device remains operational.
Regulators and lawyers are concerned about the devices. Corkery and Silver-Greenberg argue that “electronic repossession” should be governed by state laws covering traditional repossession, which generally cannot occur until payments are at least 30 days late.
I reported last year on an Oxford University study of what jobs were vulnerable to displacement by technology. I didn't find repo man on the list, but perhaps it should be added.