Thursday, November 21, 2013

Reposessing your car at gunpoint?

Late on your car payment?  In Arizona you could be a felon.

In a step backward to the days of the debtor's prison you can now be charged with a felony should you be 90 days late on a car payment.  It comes in the guise of an Arizona Revised Statute called 13-1813 and it's being used by greedy finance companies and fly by night used car dealers  to make law enforcement their pro-bono repo men. 

Here's an excerpt:

 13-1813. Unlawful failure to return a motor vehicle subject to a security interest; notice; classification

A. A person commits unlawful failure to return a motor vehicle subject to a security interest if all of the following apply:

1. The person fails to make a payment on the lien for more than ninety days.

2. The secured creditor notifies the owner in writing, by certified mail return receipt requested, that the owner is ninety days late in making a payment and is in default.

The notice shall include the following:
(a) A statement stating:

"You are now in default on loan agreement #______________. If you fail to return the _____________________ (year of vehicle, make, model) within thirty days you will be subject to 
criminal prosecution."

I highlighted the word "criminal" to emphasize a point.  You could potentially get pulled over by your friendly neighborhood police officer and get treated like Osama Bin Laden just for being  late on your car payment.  From that point you get arrested, hauled into court and lose your car.

Why?  Because it's a criminal statute and the only thing that comes up when the cop runs your plate is one word, "Stolen " 

That's right soccer mom, you and the kids are going to the hoosegow if the prosecutor decides to take up the case.  (Luckily, most of them think it's a stupid law too and don't bother)

Upstanding car dealerships and finance companies (and I use the term "Upstanding" loosely) have expressed support for the law...

 "Do I think that a person should be held accountable and prosecuted the same way a shoplifter would?  Yeah, I do, I don't see anything wrong with it.. ... Theft is theft."  David Kaufman, Phoenix Corvette Center  (  BTW, A business with 2 unanswered complaints on rip-off report and no accreditation from the BBB)

The law was proposed by the former Arizona Speaker of the House Jim Weiers who  himself owns BHFC financial services, a small car finance company.  Weiers sees no personal conflict in shepherding the law through the state legislature or the benefit it affords him...

"If you pass legislation that lowers taxes, you personally would beneift..." Jim Weiers in a written statement to KPHO TV 5 in Phoenix.

The average car repossession costs $400 but by abusing the statute a fly by night used car dealer can get the taxpayers to do his dirty work for free.  

The real problem goes far beyond using law enforcement as armed repo-men, however.  It's another indication of how government has become increasingly intertwined with the private sector.  Serving a summons in a legal proceeding is one thing but turning cops into gun toting debt collectors is quite another.

If you're incensed by the government bailout of the big banks then you should be equally outraged over this.  Regardless of your view on government regulation of the private sector there's a line that gets crossed when it directly participates in it.

If government should leave the private sector to its own devices then neither should it function as their tool.

In this case, we're talking about missing a few car payments not embezzling from orphans.  It seems in Arizona, however, they're one in the same.