The practice of wrongful repossessions has been targeted by the Consumer Financial Protection Bureau. The CFPB has highlighted illegal conduct including the illegal repossession of cars, sloppy record keeping, unreliable balance statements, and ransom for personal property.
High car prices, the CFPB says, has caused auto lenders and investors to seize vehicles for resale in the volatile used car market.
Pointing out the strong demand for used automobiles coupled with the global chip shortage, the average list price for new and used automobiles has spiked. For these reasons, and others, the CFPB is concerned that these market conditions might create incentives for risky auto repossession practices, since repossessed automobiles can command higher prices when resold.
In order to thwart wrongful repossessions, the CFPB is taking action against illegal repossessions and sloppy servicing of auto loans. The source of the enforcement action is found in the Dodd-Frank Wall Street Reform and Consumer Protection Acts which prohibit against unfair, abusive, or deceptive acts and practices such as:
Illegally seizing cars: Lenders are repossessing vehicles from borrowers who entered a payment plan.
Unreliable balance information: Inaccurate balances can lead to a borrower paying less than a sufficient amount to avoid delinquency, resulting in a wrongful repossession.
Personal property: some repossession agents are holding personal property found in repossessed vehicles hostage until the property owner pays a fee.
For more information, go to Wrongful Repossessions.
Auto Repossessions in Florida
“The timing of auto repossessions often comes as a surprise to borrowers and can cause devastating injury by depriving borrowers of the use of their vehicles. Many people experience emotional distress when a car is taken from them, lose personal property, miss work or lose their job, incur expenses for alternative transportation, and experience negative credit reporting.”