Business

August 5, 2013

GPS makes the repo man’s job easy

The latest trend in the used car business: Buy a car, get a GPS, too.

The latest trend in the used car business: Buy a car, get a GPS, too.

The twist? You may never know about it.

Car dealers especially the ones who cater to customers with bad credit increasingly are placing GPS devices on the cars they sell.

These devices aren’t the kind you mount on the dashboard to navigate city streets. They’re electronic locators, designed to help the repo man find your car if you stop paying. Some devices can even render the car inoperable until you pay up.

The trouble comes when it’s kept secret.

Bond Auto Sales in St. Petersburg, Fla., has been accused in three recent lawsuits of placing GPS devices on cars without telling buyers.

When customers successfully paid off their loans, they were invited back for a free “safety check,” the lawsuits say. Then, employees would remove the secret devices.

All three plaintiffs, two former employees and a customer, are represented by Douglas Lyons, a Tallahassee lawyer. He said he had never heard of the practice until these cases. After researching it, he found it’s not uncommon.

Car repossessions guided by GPS are so widespread the industry has its own trade group: The Payment Assurance Technology Association. The group has a code of ethics that requires its members to “fully define and disclose” the devices to customers.

One of them, Dave Ronsky, CEO of Ohio-based Payteck, said it doesn’t even make sense to place the devices secretly.

“It’s just good business to let the customer know that the dealer has the ability to either disable the starter of the vehicle or locate the vehicle,” he said.

That way, customers know their payment isn’t optional. “That’s a more effective behavior modification tool,” he said.

Michael Fischer, who owns GPSandTRACK in Phoenix, said the decision of whether to disclose the devices should be left to dealers.

They aren’t being used to spy on customers, he said, they’re a way of getting cars back if people don’t pay.

“The dealers could care less what their customers are doing all day,” he said.

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