Consumers who fail to make timely car payments or maintain insurance on their financed vehicles may face repossession. Under most auto loan contracts, the finance company has the right to take their car back without a court order and then auction the vehicle to pay off the underlying car loan. Recent statistics show that 1.7 million people faced this situation in 2018, with numbers expected to top 2 million within the next decade.
How Companies and Agents May Illegally Repossess Vehicles
While financial institutions can take a car back if the consumer fails to make loan payments, they must still obey the law and not cause a breach of the peace. Broadly, this means that financial institutions and their agents can take your car back if you have missed a payment. But, they may not engage in conduct that is likely to cause a disturbance or violence, called a “breach of peace.” The following are the most common ways that we see finance companies and repossession agents breach the peace during a vehicle repossession. These tactics will also convert what is otherwise a perfectly legal repossession process into an illegal one, opening the door to a remedy for the consumer.
Repossessing Despite the Consumer’s Objection
While finance companies and their repossession agents have the right to retake a vehicle if the consumer is past due on their auto loan, they may not start an auto repossession the vehicle if the consumer objects. There are no magic words required here. Any words that indicate the consumer’s objection are sufficient. And if the consumer does object, the repo man must stop and try again at a different time. If the agent refuses to honor this objection and continues, he does so without any protection from the law.
Breaking into a Locked Yard or Garage
Most finance agreements provide that the finance company can come onto your property to take the vehicle if you default on your auto loan. Even if your contact has a provision like this, this right does not allow finance companies or their agency to break into locked yards or garages. Likewise, the right to take a car back if a consumer has defaulted on loan terms does not give financial institutions the right to destroy unrelated property like fences, locks, or doors. By breaking into a closed garage or yard the repo agent may be committing the crime of criminal trespass or breaking and entering, both of which can be serious. So if a repossession agent wants to access a locked area, they must secure the consumer’s permission or else risk violating the law and committing a breach of peace.
Repossessing an Occupied Car
Traffic laws prohibit passengers on towed vehicles, so you would think that no company would repossess an occupied vehicle. Even so, a repo man who continues to be frustrated in their efforts have resorted to this practice, hooking up occupied vehicles to their tow truck. In most instances, this practice violates more than the motor vehicle code. Intentionally causing contact with an occupied vehicle can be battery and moving an occupied vehicle may constitute a kidnapping. Both of these are serious crimes and constitute a breach of peace that can turn a lawful repossession into an illegal one.
Threat or Use of Violence
Most repossession companies will attempt to take a vehicle when no one is present — while the consumer is asleep, at work, or shopping. In some instances though, the repossession agent does not want to wait for the consumer to leave the vehicle unattended or cannot access the vehicle without the consumer’s help. In these cases, repossession agents might ask the consumer to provide access to the vehicle or for keys so that they can drive the vehicle rather than call a tow truck. If the consumer refuses, tempers can flare and trouble can result.
In those cases, it is not uncommon to see the participants begin to threaten the use of force, with consumers attempting to defend their car and repossession agents attempting to enforce the right to take the vehicle. No matter who starts the threats , if violence becomes a possibility, then the repossession agent must stand down and leave the scene. Continuing in a repossession that has turned violent is a breach of peace that turns a legal repossession into an illegal one.
Most repossession agencies will not attempt to take a car without first notifying the police. The repo companies do this to ensure the police do not mistake their agents for car thieves and accidentally shoot or arrest them. While notifying the police is good practice that helps prevent unfortunate mistakes, police involvement can go beyond what the law allows.
Police are charged with keeping the peace and ensuring the safety of everyone in their jurisdiction. Often in repossessions, the police believe that this duty goes beyond safety and keeping the peace. Instead, police sometimes believe it is their job to assist the repo man in taking the vehicle by instructing consumers to turn over vehicles, or opening locked garages.
Sadly, most police departments have yet to learn that this is not their job, and they have no legal authority to help in this way. These actions by police operate as “curbside courtrooms” and are illegal. More importantly, not only are police prohibited from helping in repossessions, repo agents in Michigan are not allowed to ask for this help. By using police to help, repo agents open themselves to claims of civil rights violations as well as violations of collection law.
If your car was repossessed using one of these tactics, your rights may have been violated. If you would like a free consultation, call us today at (248) 965-5751. We can help you understand your rights and develop a plan to return your vehicle. The consultation is free and there is no fee unless we are able to recover for you.
- Demand for Return of Vehicle
- Demand for Return of Personal Property
- Demand for Account Statement
Related Pages on Our Site:
Legal Decisions and Statutes
- Hensley v. Gassman, 693 F.3d 681 (6th Cir. 2012)
- Soldal v. Cook County, Illinois, 506 U.S. 56 (1992)
- M.C.L. § 445.915(j) and (k)
- M.C.L. § 440.9609
Other Web Resources