Another Repo Show on TV
05/14/10 09:39
http://www.topspeed.com/cars/car-news/repossessed-to-debut-on-national-geographic-ar89908.html
/
I Read the News Today...Oh Boy.....
04/07/09 12:09
We are getting calls now
every few days from news organizations.....with the
current recession, now automobile repossessions are
becoming a news item. It's not just us...its a lot of the
bigger recovery agencies. I have seen articles recently
in the Wall Street Journal....in Car &
Driver.....in USA Today...in Newsweek.
A lot of the questions are the same...."Is your business up?" (a: yes), "Isn't this business dangerous?" (a: no), "what's the weirdest thing you repossessed?"
We are busier than ever. Its not dangerous, not like people think (its a lot safer than being a clerk at a convenience store, I would bet). And now, people are very much "on the move" and extremely hard to find.
Another thing.....people have grown unwilling to answer a knock on the door. This is a new development we have seen. People just won't come to the door. Its probably because of the fact that someone at the door represents a problem....a bill collector, the power company, a kid selling magazine subscriptions, a Jehovah's Witness....someone that they simply don't want to deal with.
Whatever it is, it sure is a weird, different time we're living in now.....
A lot of the questions are the same...."Is your business up?" (a: yes), "Isn't this business dangerous?" (a: no), "what's the weirdest thing you repossessed?"
We are busier than ever. Its not dangerous, not like people think (its a lot safer than being a clerk at a convenience store, I would bet). And now, people are very much "on the move" and extremely hard to find.
Another thing.....people have grown unwilling to answer a knock on the door. This is a new development we have seen. People just won't come to the door. Its probably because of the fact that someone at the door represents a problem....a bill collector, the power company, a kid selling magazine subscriptions, a Jehovah's Witness....someone that they simply don't want to deal with.
Whatever it is, it sure is a weird, different time we're living in now.....
Tow Times Article 2009
04/01/09 12:16
I was asked to write an
article for a national towing magazine, Tow Times. A
lot of this you might find interesting about the
changes in the
repossession industry....
***********
1. Media reports indicate that repossessions are on the rise. How is the current economy affecting the repossession industry?
Most repossession agencies are experiencing unprecendented growth right now. However, just about everyone is forecasting a change for the worse....we're picking up cars now from loans made 12, 18, 36 months ago, when times were good and credit was more freely obtained. But things have changed. At some point, our industry is going to recover all the bad loans that are out there, and the fact is, few new loans aren’t being put on the books right now by most lenders. We're at the far end of the "conveyor belt", but not much is being add to the beginning. And the few loans that are being made are to customers who have incredibly high Beacon scores...not your typical repossession customer. Now this is the case for most of the major lenders; undoubtedly recovery agencies working for BHPH car lots won’t be slowing down at all.
2. Has the current economy changed the way repossessors do business?
The repossessions we have done in the last year or so have been from people with a far different demographic background than in years past. We're repossessing more and more vehicles from real estate agents, home builders, property appraisers. The loans that are now defaulting are from people that, at the time, would have been professionals that would not have been viewed as being credit risks.
But this same group would poses their own particular challenges to a repossession agency. Most of these people have attorneys and aren't afraid to engage them at a moments notice. Also, from a tactical standpoint, this demographic would have a greater tendency to live in gated communities or on secured properties. Also certain vehicle types are harder to quickly tow.....high-dollar all-wheel-drive vehicles for example. Expensive cars in transit or in storage post an insurance liability as well.
3. Are there new methods or technologies that make the job of
repossession easier or more efficient?
It is actually more difficult in many cases. As a lot of your readership would know, its becoming increasingly difficult to actually get into many of these news vehicles once they are found, and when it needs to be done in a few seconds in a stressful situation, it can be tough. And, if anything is damaged in the process, you have to answer to two parties instead of one…the customer could complain, but the creditor would get involved too.
Also the internet has become a real forum for the exchange of ideas among people in how to avoid repossession....how to hide a vehicle, what situations make for an illegal repossession.
Some subprime lenders have GPS trackers on the vehicles themselves, and in some cases, it does dial the agent into the general area where the car might be parked. But our experience has been that in a dense metropolitan area, this degree of "close" isn't close enough to find the car. And, the client things they are handing you the repossession on a platter, and demands a discount for our services. We don’t like getting the call “you need to do this job for less because we’re going to tell you exactly where the car is”…it often doesn’t work that easily.
4. What are the rewards of operating a repossession business?
(Why would people want to get into the business?)
I often ask myself that question! But I can say that is can be very, very interesting . Its one of the last businesses where there legitimately is the "thrill of the chase"...in finding people or property that do not want to be found. Its mentally challenging, and there is never a dull day. It could be a great new business for someone in the towing business, or someone in with a private investigation agency….its pretty much a marriage of the two.
5. What are major problem issues facing the industry?
Profitability really has gone out the window. Over the past twenty years, there has been so many people jumping into the business and offering their services at discount, it has watered down the potential for profitability. In many cases, the clients are simply shopping for the cheapest price, without enough consideration for experience or ethics. For example, in order to gain a market share, several years ago newer repossessors would offer the client 5, then 10, and then 15 or more "free days" of storage. In other words, charging no storage. As this become widespread, the clients began demanding this "free storage" from all their repossessors. At the same time, the repossessor was being ask to increase the types of insurance coverages on those same vehicles; the clients turned from requiring Garagekeepers Legal Liability to Direct Primary. The repossessor, in essence was providing the only insurance coverage on the vehicle, all the while not having the ability to charge the storage to help pay for it.
Fuel costs have hurt us as well. Unlike a tow company that goes out on a call knowing they will come back with something on the hook, we run empty 90% of the time. We have to check addresses, often dozens of times, before being supplied or surfacing a newer or better addresses. We're trying new strategies, but still the main game plan used by repossessors today involves checking addresses from behind the wheel of a diesel-burning wheel lift truck.
6. People mainly tend to think about automobiles when they think of repossession. What other items are being repossessed often these days?
The industry is repossessing a lot of boats and RV's. In a time of a fading economy, the toys really are the first to go. We also repossess many tractor/trailer rigs, or one or the other. We also recover quite a few aircraft as well. And, after the real estate boom has crashed, a lot of construction-related items like backhoes, forklifts, Bobcats. There’s also office equipment, bench-testing equipment, restaurant equipment, and oddball things like tanning booths and ice-cream trucks. We also recover tractors and trailers, too. It really can be just about anything.
7. Should a towing operator want to get into the repossession
business, what are the most important first steps he or she should take?
The laws governing the repossession business are far different than the towing business. Not necessarily more difficult….but definitely different. Doing business with banks and credit unions, there are a lot of Federal laws about the handling of non-public information that we have to comply with.
Someone in the towing business already has cleared a lot of hurdles; they have the trucks, they have the secured storage facilities, and they either have or could get the proper insurance. The only thing lacking might be a good understanding of the laws, and the requirements of the clients.
The best source for learning the ropes remain getting into one of the main trade association groups. Besides being an excellent means of getting your name before the client, the trade associations all offer resources to learn about the laws and techniques, can advise you where to get insurance and training.
Another means would be to contact your local repossessor, and see if you can work as a team. Many repossession agencies are sending their field agents out in passenger cars to check addresses, or make contact with the customer, and only call in a tow truck when they actually locate the vehicle. A tow service can indirectly get into the repossession business by partnering with a good local repossession agency. It might not pay like a property tow…..it won’t at all….but it could be an additional income stream.
8. What do you think of reality television shows about repossession?
They are terrible. The most popular one is thought to be a “reality show” but it is actually a dramatization. These people do all sort of illegal and immoral things. If they tried it in the “real world” they would be in jail or before the judge before a month was out.
It escalates the potential for violence, too. If the debtor thinks a repossessor is going to assault them, they might be more likely to use a weapon in defense.
In addition, these shows might inform a debtor on how to deter a repossession. This makes our job harder, and in addition, escalates the collection costs to get the matter finalized. Those increased collection and recovery costs, like it or not, are passed along to the rest of the bill-paying public in the form of higher interest rates.
9. You’ve made the point previously that people who have items repossessed are not necessarily deadbeats and should be given
respect. How does that apply to customers in the present economy?
Absolutely, and more than ever. In our experience, the majority of the people we deal with never intended to be in this position. Their intentions were good when they signed the loan documents. Only through the loss of a job, or a divorce, or as a result of unexpected medical bills, did these people find themselves in this bind.
Fast forward to 2009, when all the professions are hurting. The turnaround in the economy has caught everyone off guard….restaurant owners, doctors, land developers, school teachers. Right now, its literally everyone, from all walks of life.
By and large these are good, honorable people. They are avoiding the bank, and us, out of embarrassment over the late payments, and the optimistic hope that something good will happen in the near future….a new job, the sale of the home, something. But right now, there’s few jobs and fewer home sales, and a lot of these customers simply are putting off dealing with the reality of the situation.
With that said, we approach them with empathy. We have a job to do, and the creditor has the absolute legal and moral right to the collateral, we still realize that these people are hurting. They include a lot of our friends and relatives.
*********
***********
1. Media reports indicate that repossessions are on the rise. How is the current economy affecting the repossession industry?
Most repossession agencies are experiencing unprecendented growth right now. However, just about everyone is forecasting a change for the worse....we're picking up cars now from loans made 12, 18, 36 months ago, when times were good and credit was more freely obtained. But things have changed. At some point, our industry is going to recover all the bad loans that are out there, and the fact is, few new loans aren’t being put on the books right now by most lenders. We're at the far end of the "conveyor belt", but not much is being add to the beginning. And the few loans that are being made are to customers who have incredibly high Beacon scores...not your typical repossession customer. Now this is the case for most of the major lenders; undoubtedly recovery agencies working for BHPH car lots won’t be slowing down at all.
2. Has the current economy changed the way repossessors do business?
The repossessions we have done in the last year or so have been from people with a far different demographic background than in years past. We're repossessing more and more vehicles from real estate agents, home builders, property appraisers. The loans that are now defaulting are from people that, at the time, would have been professionals that would not have been viewed as being credit risks.
But this same group would poses their own particular challenges to a repossession agency. Most of these people have attorneys and aren't afraid to engage them at a moments notice. Also, from a tactical standpoint, this demographic would have a greater tendency to live in gated communities or on secured properties. Also certain vehicle types are harder to quickly tow.....high-dollar all-wheel-drive vehicles for example. Expensive cars in transit or in storage post an insurance liability as well.
3. Are there new methods or technologies that make the job of
repossession easier or more efficient?
It is actually more difficult in many cases. As a lot of your readership would know, its becoming increasingly difficult to actually get into many of these news vehicles once they are found, and when it needs to be done in a few seconds in a stressful situation, it can be tough. And, if anything is damaged in the process, you have to answer to two parties instead of one…the customer could complain, but the creditor would get involved too.
Also the internet has become a real forum for the exchange of ideas among people in how to avoid repossession....how to hide a vehicle, what situations make for an illegal repossession.
Some subprime lenders have GPS trackers on the vehicles themselves, and in some cases, it does dial the agent into the general area where the car might be parked. But our experience has been that in a dense metropolitan area, this degree of "close" isn't close enough to find the car. And, the client things they are handing you the repossession on a platter, and demands a discount for our services. We don’t like getting the call “you need to do this job for less because we’re going to tell you exactly where the car is”…it often doesn’t work that easily.
4. What are the rewards of operating a repossession business?
(Why would people want to get into the business?)
I often ask myself that question! But I can say that is can be very, very interesting . Its one of the last businesses where there legitimately is the "thrill of the chase"...in finding people or property that do not want to be found. Its mentally challenging, and there is never a dull day. It could be a great new business for someone in the towing business, or someone in with a private investigation agency….its pretty much a marriage of the two.
5. What are major problem issues facing the industry?
Profitability really has gone out the window. Over the past twenty years, there has been so many people jumping into the business and offering their services at discount, it has watered down the potential for profitability. In many cases, the clients are simply shopping for the cheapest price, without enough consideration for experience or ethics. For example, in order to gain a market share, several years ago newer repossessors would offer the client 5, then 10, and then 15 or more "free days" of storage. In other words, charging no storage. As this become widespread, the clients began demanding this "free storage" from all their repossessors. At the same time, the repossessor was being ask to increase the types of insurance coverages on those same vehicles; the clients turned from requiring Garagekeepers Legal Liability to Direct Primary. The repossessor, in essence was providing the only insurance coverage on the vehicle, all the while not having the ability to charge the storage to help pay for it.
Fuel costs have hurt us as well. Unlike a tow company that goes out on a call knowing they will come back with something on the hook, we run empty 90% of the time. We have to check addresses, often dozens of times, before being supplied or surfacing a newer or better addresses. We're trying new strategies, but still the main game plan used by repossessors today involves checking addresses from behind the wheel of a diesel-burning wheel lift truck.
6. People mainly tend to think about automobiles when they think of repossession. What other items are being repossessed often these days?
The industry is repossessing a lot of boats and RV's. In a time of a fading economy, the toys really are the first to go. We also repossess many tractor/trailer rigs, or one or the other. We also recover quite a few aircraft as well. And, after the real estate boom has crashed, a lot of construction-related items like backhoes, forklifts, Bobcats. There’s also office equipment, bench-testing equipment, restaurant equipment, and oddball things like tanning booths and ice-cream trucks. We also recover tractors and trailers, too. It really can be just about anything.
7. Should a towing operator want to get into the repossession
business, what are the most important first steps he or she should take?
The laws governing the repossession business are far different than the towing business. Not necessarily more difficult….but definitely different. Doing business with banks and credit unions, there are a lot of Federal laws about the handling of non-public information that we have to comply with.
Someone in the towing business already has cleared a lot of hurdles; they have the trucks, they have the secured storage facilities, and they either have or could get the proper insurance. The only thing lacking might be a good understanding of the laws, and the requirements of the clients.
The best source for learning the ropes remain getting into one of the main trade association groups. Besides being an excellent means of getting your name before the client, the trade associations all offer resources to learn about the laws and techniques, can advise you where to get insurance and training.
Another means would be to contact your local repossessor, and see if you can work as a team. Many repossession agencies are sending their field agents out in passenger cars to check addresses, or make contact with the customer, and only call in a tow truck when they actually locate the vehicle. A tow service can indirectly get into the repossession business by partnering with a good local repossession agency. It might not pay like a property tow…..it won’t at all….but it could be an additional income stream.
8. What do you think of reality television shows about repossession?
They are terrible. The most popular one is thought to be a “reality show” but it is actually a dramatization. These people do all sort of illegal and immoral things. If they tried it in the “real world” they would be in jail or before the judge before a month was out.
It escalates the potential for violence, too. If the debtor thinks a repossessor is going to assault them, they might be more likely to use a weapon in defense.
In addition, these shows might inform a debtor on how to deter a repossession. This makes our job harder, and in addition, escalates the collection costs to get the matter finalized. Those increased collection and recovery costs, like it or not, are passed along to the rest of the bill-paying public in the form of higher interest rates.
9. You’ve made the point previously that people who have items repossessed are not necessarily deadbeats and should be given
respect. How does that apply to customers in the present economy?
Absolutely, and more than ever. In our experience, the majority of the people we deal with never intended to be in this position. Their intentions were good when they signed the loan documents. Only through the loss of a job, or a divorce, or as a result of unexpected medical bills, did these people find themselves in this bind.
Fast forward to 2009, when all the professions are hurting. The turnaround in the economy has caught everyone off guard….restaurant owners, doctors, land developers, school teachers. Right now, its literally everyone, from all walks of life.
By and large these are good, honorable people. They are avoiding the bank, and us, out of embarrassment over the late payments, and the optimistic hope that something good will happen in the near future….a new job, the sale of the home, something. But right now, there’s few jobs and fewer home sales, and a lot of these customers simply are putting off dealing with the reality of the situation.
With that said, we approach them with empathy. We have a job to do, and the creditor has the absolute legal and moral right to the collateral, we still realize that these people are hurting. They include a lot of our friends and relatives.
*********