6 ms·

> In Austin, Tex., a large subprime lender used a device to track down and repossess the car of a woman who had fled to a shelter to escape her abusive husband

by nja 6y ago

> In Austin, Tex., a large subprime lender used a device to track down and repossess the car of a woman who had fled to a shelter to escape her abusive husband [ ... ] The move to the shelter violated a clause in her auto loan contract that restricted her from driving outside a four-county radius, and that prompted the lender to send a tow truck to take back the vehicle. If the lender could so easily locate the client, Ms. Kleinpeter said, what was stopping her husband? I can't stop re-reading "a clause in her auto loan contract that restricted her from driving outside a four-county radius". Is that a normal thing in auto loans? Restricting free movement? How is that even legal?

globular-toast 6y ago
Why would it be illegal? It's their car. They set the rules.
- lotsofpulp 6y ago
  I don't understand why you are downvoted. The options were for this lender to not lend this person a car, or lend this person a car with certain conditions reducing the lender's risk to acceptable levels. Car sales aren't a monopolized business, and there's plenty of competition, so I also don't see any evidence of collusion on the side of the sellers.
- lmilcin 6y ago
  It is not their car. The car is a collateral. There is a difference. Also, they don't "set" the rules. The rules are set in a contract and contract is bilateral.
  - globular-toast 6y ago
    It's their car until you sign the contract that they wrote.
geoduck14 6y ago
Hi! I work for a large auto loan lender. I have NEVER heard of a practice limiting where you can drive your car. I would imagine it would be bad for business (e.g., here's a car, you can't use it that much, have fun!). Personally, I would protest VERY loud if I found my company was doing this. Also, I'm mostly certain we do have trackers on many of our cars, and I would imagine the data is transmitted securely so husbands can't use that signal.
- TomK32 6y ago
  > ... I would imagine the data is transmitted securely so husbands can't use that signal. It won't matter if the data is transmitted (and stored) securely, a husband concerned about his wife will have enough data about the auto contract to use some social engineering and get the car's location from the lender.
- gjs278 6y ago
  hi! you don’t work for a ghetto auto lender. they require very little money down and they charge insane interest rates. and don’t care about your credit. that’s why the cars are such a flight risk.
dfadsadsf 6y ago
My guess would be that it limits where you can live (park car overnight) but not where you can drive. For example car insurance price is different for different cities - the same could be the case for subprime loan.
- bbarnett 6y ago
  I believe so. I had the same thing, with a rent to own furniture place, 27 years ago. I moved from one side of the country to the other, to open a new corporate office, but the move was hasty. 2 weeks from decision to hitting the road. I just packed up everything, not thinking about the TV I rented-to-own. When it came time to pay, I had also switched banks, so I called them. After I explained that I moved, and wanted to setup a new debit-from-account, the woman on the other end lambasted me, on and on, explaining breach of contract, that I stole the TV, I'm a thief, this sort of thing. Obviously my mistake for not reading the contract, and they were local only, so they had the same sort of geo-only clause, but at the same time I called them! No late payments, completely current, yet they unloaded on me like I was 6 months late and had planned some sort of elaborate theft. Fed up with the abuse, I asked her to just get over it, and tell me where to send new payments. Nope, I was apparently a thief, an ass, a liar, on and on again. I cut that short, asked again how to send payment, or do they not want anything? Again the yelling. I shouted goodbye and hung up. I had given her my new address and phone number yet never heard from them again. With these sorts in this industry, I am not surprised they just towed.
FooBarBizBazz 6y ago
> The move to the shelter violated a clause in her auto loan contract that restricted her from driving outside a four-county radius, and that prompted the lender to send a tow truck to take back the vehicle. The lender should have spoken to her and adjusted the allowed region rather than escalating immediately to a towtruck. Ideally she would have had the presence of mind to call her lender, but some understanding should be shown. > If the lender could so easily locate the client, Ms. Kleinpeter said, what was stopping her husband? This makes no sense. Her husband doesn't work for the auto lender. Why would he have access to that? It feels dishonest/manipulative to use this argument.
- imoverclocked 6y ago
  I can easily see a scenario where an abusive husband leans on some guy/gal working in a car dealership to get information. In theory the information shouldn’t flow across that border but in practice it does.
- paxys 6y ago
  The woman escaped an abusive relationship and found safety in a shelter. It isn't a question of "presence of mind", calling your auto loan agent would be the absolute last priority for everyone in her shoes.
- bsder 6y ago
  > This makes no sense. Her husband doesn't work for the auto lender. Why would he have access to that? It feels dishonest/manipulative to use this argument. "Hey, my car went walkabout and if I report this to the police it's going to take forever and cost a lot of time and money for all of us. I need to find it and you folks have a tracking system on it. Where is it? Thanks." I suspect that would probably work in 90% of the cases. These aren't exactly the most reputable people. A little bit of cash might get another 5% of the cases. Since he is the husband, his name is likely on everything as well, so he has a legal right to find the car. What's worse: a lot of abusers make sure to put only their own name on things so that what the wife did is nominally illegal. A little bit of nominally legal manipulation and you might actually be able to get the actual police to do all the legwork for you.
- 6y ago
TylerE 6y ago
Normal? No. But the kind of "buy here pay here" places that use these devices are sellers of last resort. Basically the vehicle lending equivalent of a payday lender.
MertsA 6y ago
It sounds like that contract was in place to prevent someone from deciding to move somewhere out of the Austin area without telling the lender where they moved to. For moving to a different country that's basically the status quo. At the very least, you need the lienholder's authorization if you want to get the vehicle out of the country, customs will not let you export it if you don't have a clean title or authorization from whatever lienholder. It's not totally unusual for a contract to stipulate residency. It's fairly common to do that for a lease agreement. The lender is on the hook for the outstanding balance on the loan if they can't get the debtor to pay up. That collateral just up and disappearing substantially changes the risk associated with the loan. I don't see why it should be illegal to write up an agreement along the lines of "I'll loan you the money for this car, but you have to park it in the surrounding area until it's paid off". No one is claiming that the agreement required the debtor to live in that 4 county radius, just that until they owned the vehicle outright that the vehicle had to be kept there. As for the argument about how it's endangering the woman from the article, is the car hers or not? If it's in her name then this is just idle speculation that the lender would disclose that information to the abusive husband. If it's not in her name then there's nothing stopping the abuser from just contacting the lender and telling them to pound sand the car is gone. It's not like it's hard to get them to put the car up for repossession and have them pick up the car and disclose the location the next time she goes to WalMart. Even without the GPS tracker it's already commonplace for lenders to contract out repossessions to third parties who trawl parking lots and subdivisions with ALPR cameras looking for cars up for repossession.
stmfreak 6y ago
It’s a contract. You agree to the terms or you borrow the money from somewhere else. The thing this article casually omits throughout, aside from the opening, is that these are sub-prime borrowers. They have a history of poor credit. They probably are not putting much money down. They have a history of being late on payments. In order to get the lending terms THEY find favorable, they agreed to install an interrupt device. I just purchased a car without one and got a great rate because I spent years... YEARS! Fixing and improving my credit history. These people want the same terms without the work or change in behavior.
- avmich 6y ago
  > It’s a contract. America has a long and honored tradition of mechanisms preventing some clauses in contracts to be legal. IANAL, but maybe a next patch to laws could be to forbid such behavior (on the side of lenders) as predatory. Or maybe more sane approaches are possible. It's even more important when some clauses can be enforced mechanically, without going through the legal system. This underscores the importance of having the ability to negate mechanical means to enforce contract clauses - at least in some cases :) like this. With rise of IoT, the problem seems to be getting more urgent.
- SturgeonsLaw 6y ago
  It just seems utterly bizarre though. "You can buy this TV on credit, but you're only allowed to watch the news on it". "I'll loan you money to buy an oven, but you're only allowed to roast chicken in it". For any other product it seems ridiculous, and rightly so. The car obviously has some kind of tracking device in it for them to be able to tell where it is, and that it has even violated this clause, so they can't be afraid that she'll drive off into the sunset, never to be heard from again. Aside from the Kafka factor, it also limits her to job opportunities found only in those counties, which would make it harder for her to improve her situation than if she had free movement. > These people want the same terms without the work or change in behavior. Nobody's arguing that a subprime borrower should receive the same interest rate as someone with a good credit history, but limiting the use of the vehicle is an entirely different scenario, and one I'm struggling to think of any justification for.

by nja 6y ago

globular-toast 6y ago

Why would it be illegal? It's their car. They set the rules.

lotsofpulp 6y ago
I don't understand why you are downvoted. The options were for this lender to not lend this person a car, or lend this person a car with certain conditions reducing the lender's risk to acceptable levels. Car sales aren't a monopolized business, and there's plenty of competition, so I also don't see any evidence of collusion on the side of the sellers.
lmilcin 6y ago
It is not their car. The car is a collateral. There is a difference. Also, they don't "set" the rules. The rules are set in a contract and contract is bilateral.
- globular-toast 6y ago
  It's their car until you sign the contract that they wrote.

geoduck14 6y ago

Hi! I work for a large auto loan lender. I have NEVER heard of a practice limiting where you can drive your car. I would imagine it would be bad for business (e.g., here's a car, you can't use it that much, have fun!). Personally, I would protest VERY loud if I found my company was doing this. Also, I'm mostly certain we do have trackers on many of our cars, and I would imagine the data is transmitted securely so husbands can't use that signal.

TomK32 6y ago
> ... I would imagine the data is transmitted securely so husbands can't use that signal. It won't matter if the data is transmitted (and stored) securely, a husband concerned about his wife will have enough data about the auto contract to use some social engineering and get the car's location from the lender.
gjs278 6y ago
hi! you don’t work for a ghetto auto lender. they require very little money down and they charge insane interest rates. and don’t care about your credit. that’s why the cars are such a flight risk.

dfadsadsf 6y ago

My guess would be that it limits where you can live (park car overnight) but not where you can drive. For example car insurance price is different for different cities - the same could be the case for subprime loan.

bbarnett 6y ago
I believe so. I had the same thing, with a rent to own furniture place, 27 years ago. I moved from one side of the country to the other, to open a new corporate office, but the move was hasty. 2 weeks from decision to hitting the road. I just packed up everything, not thinking about the TV I rented-to-own. When it came time to pay, I had also switched banks, so I called them. After I explained that I moved, and wanted to setup a new debit-from-account, the woman on the other end lambasted me, on and on, explaining breach of contract, that I stole the TV, I'm a thief, this sort of thing. Obviously my mistake for not reading the contract, and they were local only, so they had the same sort of geo-only clause, but at the same time I called them! No late payments, completely current, yet they unloaded on me like I was 6 months late and had planned some sort of elaborate theft. Fed up with the abuse, I asked her to just get over it, and tell me where to send new payments. Nope, I was apparently a thief, an ass, a liar, on and on again. I cut that short, asked again how to send payment, or do they not want anything? Again the yelling. I shouted goodbye and hung up. I had given her my new address and phone number yet never heard from them again. With these sorts in this industry, I am not surprised they just towed.

FooBarBizBazz 6y ago

> The move to the shelter violated a clause in her auto loan contract that restricted her from driving outside a four-county radius, and that prompted the lender to send a tow truck to take back the vehicle. The lender should have spoken to her and adjusted the allowed region rather than escalating immediately to a towtruck. Ideally she would have had the presence of mind to call her lender, but some understanding should be shown. > If the lender could so easily locate the client, Ms. Kleinpeter said, what was stopping her husband? This makes no sense. Her husband doesn't work for the auto lender. Why would he have access to that? It feels dishonest/manipulative to use this argument.

imoverclocked 6y ago
I can easily see a scenario where an abusive husband leans on some guy/gal working in a car dealership to get information. In theory the information shouldn’t flow across that border but in practice it does.
paxys 6y ago
The woman escaped an abusive relationship and found safety in a shelter. It isn't a question of "presence of mind", calling your auto loan agent would be the absolute last priority for everyone in her shoes.
bsder 6y ago
> This makes no sense. Her husband doesn't work for the auto lender. Why would he have access to that? It feels dishonest/manipulative to use this argument. "Hey, my car went walkabout and if I report this to the police it's going to take forever and cost a lot of time and money for all of us. I need to find it and you folks have a tracking system on it. Where is it? Thanks." I suspect that would probably work in 90% of the cases. These aren't exactly the most reputable people. A little bit of cash might get another 5% of the cases. Since he is the husband, his name is likely on everything as well, so he has a legal right to find the car. What's worse: a lot of abusers make sure to put only their own name on things so that what the wife did is nominally illegal. A little bit of nominally legal manipulation and you might actually be able to get the actual police to do all the legwork for you.
6y ago

TylerE 6y ago

Normal? No. But the kind of "buy here pay here" places that use these devices are sellers of last resort. Basically the vehicle lending equivalent of a payday lender.

MertsA 6y ago

It sounds like that contract was in place to prevent someone from deciding to move somewhere out of the Austin area without telling the lender where they moved to. For moving to a different country that's basically the status quo. At the very least, you need the lienholder's authorization if you want to get the vehicle out of the country, customs will not let you export it if you don't have a clean title or authorization from whatever lienholder. It's not totally unusual for a contract to stipulate residency. It's fairly common to do that for a lease agreement. The lender is on the hook for the outstanding balance on the loan if they can't get the debtor to pay up. That collateral just up and disappearing substantially changes the risk associated with the loan. I don't see why it should be illegal to write up an agreement along the lines of "I'll loan you the money for this car, but you have to park it in the surrounding area until it's paid off". No one is claiming that the agreement required the debtor to live in that 4 county radius, just that until they owned the vehicle outright that the vehicle had to be kept there. As for the argument about how it's endangering the woman from the article, is the car hers or not? If it's in her name then this is just idle speculation that the lender would disclose that information to the abusive husband. If it's not in her name then there's nothing stopping the abuser from just contacting the lender and telling them to pound sand the car is gone. It's not like it's hard to get them to put the car up for repossession and have them pick up the car and disclose the location the next time she goes to WalMart. Even without the GPS tracker it's already commonplace for lenders to contract out repossessions to third parties who trawl parking lots and subdivisions with ALPR cameras looking for cars up for repossession.

stmfreak 6y ago

It’s a contract. You agree to the terms or you borrow the money from somewhere else. The thing this article casually omits throughout, aside from the opening, is that these are sub-prime borrowers. They have a history of poor credit. They probably are not putting much money down. They have a history of being late on payments. In order to get the lending terms THEY find favorable, they agreed to install an interrupt device. I just purchased a car without one and got a great rate because I spent years... YEARS! Fixing and improving my credit history. These people want the same terms without the work or change in behavior.

avmich 6y ago
> It’s a contract. America has a long and honored tradition of mechanisms preventing some clauses in contracts to be legal. IANAL, but maybe a next patch to laws could be to forbid such behavior (on the side of lenders) as predatory. Or maybe more sane approaches are possible. It's even more important when some clauses can be enforced mechanically, without going through the legal system. This underscores the importance of having the ability to negate mechanical means to enforce contract clauses - at least in some cases :) like this. With rise of IoT, the problem seems to be getting more urgent.
SturgeonsLaw 6y ago
It just seems utterly bizarre though. "You can buy this TV on credit, but you're only allowed to watch the news on it". "I'll loan you money to buy an oven, but you're only allowed to roast chicken in it". For any other product it seems ridiculous, and rightly so. The car obviously has some kind of tracking device in it for them to be able to tell where it is, and that it has even violated this clause, so they can't be afraid that she'll drive off into the sunset, never to be heard from again. Aside from the Kafka factor, it also limits her to job opportunities found only in those counties, which would make it harder for her to improve her situation than if she had free movement. > These people want the same terms without the work or change in behavior. Nobody's arguing that a subprime borrower should receive the same interest rate as someone with a good credit history, but limiting the use of the vehicle is an entirely different scenario, and one I'm struggling to think of any justification for.