Lenders that proceed with vehicle repossessions should make sure they are following the letter of the law, lest they be sued by an irked consumer, says lawyer Mark Edelman, who represents financial institutions.
“We're seeing litigation involving repo notices,” he tells a recent Auto Finance Summit. “You can't use the same form in all 50 states. Eighteen states require a notice before repossession. Eight more states have a requirement that you must say, ‘I'm not taking late payments; you must come up to date or we'll repo your car.’
“It requires a high level of specificity or you risk court action,” he says. “And in the court of public opinion, you don't want to look like someone who is abusing customers.”
The legal term for a repo is “loss recovery.” In effect, it is a “dispossession of property,” Edelman says. “My legal advice: take care.”