Wednesday, October 8, 2014

Sometimes, There Are No Good Answers...

Formynder sends this one in. This is one of those tough stories that makes you think. I like the technology aspect, even if it does scare the living bejeezus out of me.

Miss a Payment? Good Luck Moving That Car
The thermometer showed a 103.5-degree fever, and her 10-year-old’s asthma was flaring up. Mary Bolender, who lives in Las Vegas, needed to get her daughter to an emergency room, but her 2005 Chrysler van would not start.

The cause was not a mechanical problem — it was her lender.

Ms. Bolender was three days behind on her monthly car payment. Her lender, C.A.G. Acceptance of Mesa, Ariz., remotely activated a device in her car’s dashboard that prevented her car from starting. Before she could get back on the road, she had to pay more than $389, money she did not have that morning in March.
At first blush, it's outrageous. Three days late with a payment and they disable your car? What kind of monster would do such a thing? Well, as usual, the truth is somewhere in between. Dig a little deeper into the article and you find this:
Auto loans to borrowers considered subprime, those with credit scores at or below 640, have spiked in the last five years. The jump has been driven in large part by the demand among investors for securities backed by the loans, which offer high returns at a time of low interest rates. Roughly 25 percent of all new auto loans made last year were subprime, and the volume of subprime auto loans reached more than $145 billion in the first three months of this year.

But before they can drive off the lot, many subprime borrowers like Ms. Bolender must have their car outfitted with a so-called starter interrupt device, which allows lenders to remotely disable the ignition. Using the GPS technology on the devices, the lenders can also track the cars’ location and movements.
Translated: These are very high risk loans, people that 20 years ago wouldn't have qualified for any sort of car loan, new or used. Not only that, but they know from day one what the penalties are for missing payments. Kinda borks the sympathy-meter, doesn't it? I guess it makes for much less of a sensational story to write "actions have consequences" like I tell my kids...

The one thing that jumped out at me was this, too:
“No middle-class person would ever be hounded for being a day late,” said Robert Swearingen, a lawyer with Legal Services of Eastern Missouri, in St. Louis. “But for poor people, there is a debt collector right there in the car with them.”
That's because - wait for it - "middle-class" people pay their damn bills. They don't put themselves in situations where they need to go to shaky loan places.These types of loans are sought out by people with lousy credit. The eeeeeeevil middle class didn't go to their houses in the middle of the night and screw up their credit limit. This is something they brought on themselves. Rather than be happy they can get a loan - no matter how strict the terms - and afford a new or new car (rather than drive an old clunker than falls apart on a regular basis), they whine about how unfair it is that loan companies want their money back on a timely basis.

Now, if the car is shut while moving, that's another story entirely. That is 100% a safety issue, and if the system will allow the car to be shut down while it is running, that's something that needs to be addressed. If the trigger mechanism is so sophisticated that it can be run by a smartphone, it should certainly be able to tell if the car is in motion. I would imagine it would be easy enough to set it up so that the lockout only works on start-up - i.e. it interrupts the linkage between the ignition such that the *next* time the car is started after the signal is killed it won't work.

As for the "shutting down while the car is in a bad neighborhood", well, that's a case of tough rocks. As long as the car is not moving, it is fair game. If you signed on to a loan that had a stipulation that the car would be shut down remotely if you missed a payment, stay the hell out of bad neighborhoods when you're late on your payments. It's just that simple. Either that, or don't miss your payments. If you can't make timely payments, deal with junkers. It's how I got through grad school.

On a similar note, though, the mere fact this technology exists scares the hell out of me. It is only a matter of time before these lockouts become mandatory on all cars, and a short skip-and-a-jump until someone figures out a way to hack the lock. Won't car theft be so much fun when all you need are mad computer skills rather than a slimjim? And no more high speed chases with cops - which, while it sounds great on its face, it leads to more questions. Like, say, what happens when cops get used to being able to shut cars down remotely, then they come across someone that reprogrammed their car? Or shuts down the police car's engine?

Or, say, the next time you get into an argument with someone that knows their way around a computer and decides to teach you a lesson...

That is all.


Farm.Dad said...

Never heard of " Onstar " jay ? The future is now you know.

libertyman said...

How about automatic speeding tickets? Let's link it to the IRS shall we? What could go wrong?
You have nothing to hide, right? Why was your Bentley at such and such an address? We have been watching him you know. And we ran last year's 1040, so how do afford that Bentley anyway?

Dave H said...

Big Brother aside, I'd be surprised if the loan shark, er, company wouldn't cut you a little slack if you called a day or two before your payment was due and explained that you'd be late that month. They're not in business to cut your throat, they just want their money. If they don't hear from you they have to assume you're blowing them off.

Evyl Robot Michael said...

In all fairness, this is nothing new. Over ten years ago, I worked at the "remote parts warehouse" owned by a local Ford dealer which was, ironically, on the same property as an unaffiliated buy-here-pay-here dealership. Needless to say the other dealership was a small operation and they fitted all their cars with such a device. One of the guys that worked there was constantly leaving in his tow truck to take a road trip to execute a repossession. It seems like those places sell the same cars over and over again, almost more of a rental service than anything else.

Sailorcurt said...

My understanding of the technology is that it doesn't disable the engine, only the starter, so if the car's running, it can't shut it down.

You're right on the money about the sympathy factor though...they know that this device is being installed when they buy the car. They know what the consequences will be if they miss payments, they have nothing to cry about.

Middle-class people tend to pay their bills. That's part of what enables them to make it to the middle class to begin with. There was a time in my life that I lived on Ramen noodles, had cardboard boxes covered with old sheets as furniture and drove a 15 year old car (heck, I still do that) that I could afford.

Doing those things and investing in my future, rather than wasting money on fancy cars with spinny wheels and big screen TV's is what enabled me to get to the place in life I'm at now.

So, sympathy factor for these people is pretty low.

Plus, I have to take the entire story with a grain of salt as it was built solely on the anecdotes of people who, to put it gently, experience has taught me to be very wary of their sob stories.

This is nothing more than a bleeding heart liberal reporter trying to make hay on the old "evil businesses abusing poor people" canard.

There are used car dealers that are shysters...and pretty much everyone in any city knows who they are...but most of them are simply trying to ensure that they actually get paid for the products that they've sold. I have no problem with that.

Even as far as the big brother implications...this is private businesses protecting their investments. I'm MUCH more concerned about the recent story about the feds floating the idea that all cars should be equipped with transmitters that broadcast their speed, location, and other telemetry all the time.

Ostensibly this is so that the rapidly growing number of "smart cars" can know where all the other cards on the road are and avoid crashes...but the "big brother" implications (you mentioned automatic tickets? How about if our car itself is lawfully required to report our speed at all times?) are MUCH worse with something like that.

But, of course, there's no way technology like that would be abused by the government, right?


Veeshir said...

This is not at all new.

There are a bunch of patents on just that system and they're mostly more than 10 years old.

The patents even specifically mention We Tote De Note places (buy here pay here) and other risky loans.

I'm not a fan, but I can understand it and can even accept it.

They can save money (and charge less for cars) if they don't have to worry about repoing cars from people in bad neighborhoods.

Cargosquid said...

I've seen articles where some of the people have said the companies keep shutting them down even when their payments are current. And they've shown the payment history to the reporter.

Also, I've seen reports where the tech is not installed correctly and it shuts down the engine instead of disabling the car.

I don't like it. Too much chance for abuse.
If they are that worried, they shouldn't be making the loans.