Yes. Many lawsuits have been filed against repossession companies for violating people’s rights during repossessions. If a repossession company violated the Fair Debt Collection Practices Act (“FDCPA”), then pursuant to that federal statute, it would have to pay a consumer compensation of up to $1,000 in statutory damages, any actual damages, and cover the consumer’s legal fees and any court costs.
In the United States District Court for the District of Minnesota, a federal lawsuit was filed against a creditor, a repossession company, and a repossession agent. The repossession company and its agent were sued for an alleged violation of the FDCPA and all defendants were sued for alleged violations of Minnesota state law. The docket number for this case is Civil Action No. 0:14-cv-00173-ADM-FLN.
The plaintiff in this case alleged that she entered into a loan agreement and financed the purchase of her vehicle with the creditor. She alleged that she made a number of late and partial payments throughout the lifetime of the loan, which the creditor accepted. The plaintiff then alleged that in the summer of 2013, she fell behind on her final payments. She alleged that in October 2013, her creditor mailed her a letter which informed her of the default and her right to cure the default, but that she was unable to make the payments before the due date.
The plaintiff alleged that in November 2013, as she was leaving her house, she noticed that her garage door was open and that the light was on. The plaintiff alleged that the repossession agent opened and entered her garage in order to identify her vehicle. She alleged that as she was backing out of her driveway in her vehicle, she noticed that a car was blocking her driveway. The plaintiff alleged that she left her vehicle to approach the car but upon seeing the repossession agent exit the car and walk towards her, she returned to her vehicle and closed the door. She then alleged that the repossession agent entered into the back seat of her vehicle and stated that he was there to repossess her vehicle. Afterwards, the plaintiff alleged that she told the agent that she would not give him the vehicle.
Additionally, the plaintiff alleged that as she tried to drive the vehicle back into the garage, the agent told her that he would call the police and claim that she was kidnapping him. The plaintiff alleged that upon hearing this, she stopped the vehicle, exited, and told the agent to leave the vehicle. She alleged that the repossession agent refused to exit the vehicle and that he eventually called 911 to request for the police to come to the scene. She also alleged that he called his dispatcher and requested for a tow truck to take the vehicle away. The plaintiff alleged that the repossession agent then called the police again to cancel his request but that she insisted for the police to come.
The plaintiff alleged that after a police officer arrived, she explained the situation to him and spoke with the repossession agent’s dispatcher. She alleged that the dispatcher informed her of the repossession company’s name and told her that the agent would follow proper repossession procedure in the future. Additionally the plaintiff alleged that the police officer told her that he could not interfere with the dispute because it was a civil matter. She alleged that shortly afterward, the repossession agent’s tow truck arrived and towed away her vehicle. The plaintiff alleged that the tow truck and police car obstructed the street and that many of her neighbors were watching over the course of the incident. The plaintiff alleged that because of the incident, she suffered a lot of emotional distress, anxiety, and humiliation.
The plaintiff alleged that she called her creditor the next morning but that she was unable to get help because the office was closed for the weekend. The plaintiff also alleged that since she was left without having a means of transportation, she had to leave her children with her ex-husband for the weekend. She then alleged that she spoke with an employee of the creditor on the following Monday in order to discuss her account. She alleged that the employee told her that she would have to pay her full account balance plus repossession fees in order to receive her car back. She also alleged that the employee informed her that there was no way for her to receive the vehicle back immediately but that a “hold” would be placed on her account in order to prevent the vehicle from being auctioned off. Afterward, the plaintiff alleged that she called the repossession company who told her that it still retained the vehicle and that there were also repossession fees that she had to pay to them. She alleged that as a result of the illegal repossession, she suffered monetary loss and needed to seek counseling.
The plaintiff alleged that her vehicle’s repossession was unlawful because the repossession company did not have the right to take the vehicle because she told the agent that she would not allow him to take the vehicle and had asked him to leave her property. The plaintiff also alleged that the defendants breached the peace during the repossession, and that the repossession agent illegally trespassed onto her property and used threats against her.
In the United States District Court for the Western District of Wisconsin, a federal lawsuit was filed against a repossession company for violations of the FDCPA and the Wisconsin Consumer Act. The docket number for this case is Civil Action No. 3:20-cv-00130-WMC.
The plaintiff alleged that he purchased a vehicle and financed its purchase with a non-party creditor who had a lien on the vehicle. He alleged that he fell behind on his loan payments in 2019 and that the creditor contracted with a repossession company in order to have a repossession conducted. The plaintiff then alleged that in January 2020, the repossession company went to his house in order to repossess the vehicle. He alleged that when he realized what was happening, he approached the repossession agent in order to protest the repossession. The plaintiff alleged that despite his verbal protests, the repossession agent still took his vehicle away.
The plaintiff alleged that the repossession of his vehicle was unlawful because the repossession company breached the peace. He alleged that the defendant did not have a legal right to repossess his vehicle because he verbally protested the repossession.
What constitutes a violation of a consumer’s rights during the repossession process?
A creditor has to comply with the laws of the state that a consumer resides in during the repossession process. Any third-party repossession companies that are hired by the lender of a consumer’s auto loan must follow not only the consumer’s state’s respective state-specific repossession laws but also the Fair Debt Collection Practices Act, a federal law that protects consumers from unlawful debt collectors. Prior to a repossession, and depending on the state, a creditor may have to provide the consumer with a pre-repossession notice before it can legally repossess the vehicle. When conducting a repossession, the repossession company does not have the right to breach the peace. Examples of a breach of the peace include using physical force, being violent, damaging a consumer’s property, and continuing with a repossession after the consumer verbally objects to it; the act is illegal in all U.S. states.
In some states, it is illegal for a repossession company to trespass onto a consumer’s property without the consumer’s permission to conduct a repossession on their property. It is also illegal for a repossession company to repossess the incorrect vehicle. Depending on the state, a creditor may have to send the consumer a repossession notice, such as a pre-sale notice for the disposition of the vehicle, and/or a post-sale notice after the repossession has occurred. If a consumer’s vehicle was unlawfully repossessed, it is possible that the consumer would not have to pay any deficiency balance on their loan. If the repossession company violated the FDCPA, then pursuant to that federal statute, the repossession company would have to pay the consumer compensation of up to $1,000 in statutory damages, any actual damages, and cover their legal fees and any court costs.