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Debt collectors track subprime loan borrowers, disable vehicles to punish poor for late payments


Debt collectors

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(NaturalNews) Technology in the Digital Age continues to be used as a sledgehammer against the public, even as it is ostensibly being developed to "serve mankind."

The latest? Lenders disabling your car remotely if you miss too many payments, regardless of your reasons for doing so (even if they happen to be pretty good -- like if you haven't worked in months).

The New York Times detailed one of the more distressing cases involving this new technology:

The thermometer showed a 103.5-degree fever, and her 10-year-old's asthma was flaring up. Mary Bolender, who lives in Las Vegas, needed to get her daughter to an emergency room, but her 2005 Chrysler van would not start.

The cause was not a mechanical problem -- it was her lender.


Bolender's offense was that she had fallen behind on her monthly car payment -- by three days, the Times reported.

'I felt absolutely helpless'

Her lender, C.A.G. Acceptance of Mesa, Arizona, had activated a device in the dashboard of her van remotely, via satellite, which prevented it from starting. And before she could get it to start once more, she had to pay nearly $400 -- funds that she did not really have that March morning.

"I felt absolutely helpless," Bolender, a single mother who had quit working to care for her daughter, told the Times. But that wasn't her only experience with the remote disabling: It happened again in April and June.

The new technology is being employed by lenders as "Wall Street's version of Big Brother," the Times reported, mostly against consumers whose credit scores took a hit during the recent financial recession.

Specifically, automobile loans that are considered subprime -- that is, those made to borrowers whose credit scores are at or below 640 -- have dramatically increased since 2009. The increase stems largely from demand among investors for securities backed by the loans, "which offer high returns at a time of low interest rates," the Times notes.

About one-quarter of all new automobile loans made over the past year have been subprime; the volume of subprime loans grew to more than $145 billion in the first quarter of 2014.

However, before subprime borrowers can leave the car lot, they have to have their automobiles fitted with a so-called starter interrupt mechanism, which will allow lenders to prevent it from being started. The technology works through GPS installed in the devices; in addition, lenders can also track a car's location and movements (no chance for this data to be stolen, hacked or abused...).

"The devices, which have been installed in about two million vehicles, are helping feed the subprime boom by enabling more high-risk borrowers to get loans," the Times reported. "But there is a big catch. 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."

'It was horrifying'

As you might imagine, the kind of surveillance and data-storage power retained by lenders is rankling privacy experts and even some lawmakers. What's more, there are instances where that kind of information -- and the power to shut down vehicles remotely -- is proving dangerous to borrowers:

  • The Times reported that an Austin, Texas-based subprime lender shut down a car belonging to a woman who had moved to a shelter to avoid her abusive husband. The move violated a clause in her lending contract that restricted her from driving outside a four-county area, so the lender sent a tow truck to repossess the car; she worried that, if the lender could locate her so easily, why couldn't her husband simply find out where she'd gone from the tow truck company?
  • In 2013, the Nevada state Legislature heard testimony from T. Candice Smith, 31, of Las Vegas, who told them that she thought she would die when her car was shut down as she drove on a busy three-lane interstate.
    "It was horrifying," she recounted, further stating, "I felt like even though I made my payments and was never late under my contract, these people could do whatever they wanted, and there was nothing I could do to stop them."
    "It's a safety hazard for the driver and for all others on the road," her lawyer, Sophia A. Medina, with the Legal Aid Center of Southern Nevada, told the Times.

Sources:

http://dealbook.nytimes.com

http://www.dailymail.co.uk

http://www.syracuse.com

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