ARA is creating a series of informational releases about issues
that our industry is facing and how, working together with all stakeholders, we
can arrive at solutions that are fair and serve us all well.
We want to thank Mike Peplinski of Harding Brooks Insurance Agency for his
contributions to this letter as well as the time he has spent with the
forwarders and lenders to assist all sides in coming to a workable solution.
The definition:
Take-Backs are defined as a piece of collateral, usually an auto or truck that has been recovered, released to a transport company and returned to the recovering agency to facilitate the consumer redemption process.
The issue:
The number one issue is the loss of chain of possession and the resulting claims of damage and/or wrongdoing. The agency’s insurance carriers have advised that on the surface these take-backs open them to additional exposures. The lack of explanation as to why the agents are being asked to take these vehicles back has added to the confusion and misunderstandings in the industry. We have heard and seen the claims that the agents are just being taken advantage of because someone can; this perception is so very wrong.
We need to look no further than the laws and regulations of our state and federal agencies. As is the case in most pain points in our industry, it begins with a lawyer claiming unfair treatment of a consumer. We are not taking a stand as to their being true or not. However, we believe that with a concerted joint effort between the lenders, forwarders, insurance carriers and agency owners, we can address an issue
that impacts all stakeholders in our industry. The solution must be fair for all parties, one that considers the time and efforts of the agency owners.
Solution:
Harding Brooks Insurance Agency addressed the issue in multiple posts in the past few months. They provided details of the documentation needed from the Lender for insurance coverage to apply. The necessary documentation is listed, again, below:
· A written statement that the assignment is Open and Active
· A condition report must be completed upon return of the repossessed vehicle to your lot
· The hold harmless you receive should be signed by all parties
· The hold harmless should read “Lender” agrees to Defend, Indemnify, and Hold Harmless “Recovery Company” from any claims, legal expenses or losses of any type incurred from taking back a vehicle from Auction
*** Always consult your Attorney for proper wording before signing any contract
We have been told that a well written and concise hold harmless is the first item that must be in place to protect the recovery professionals from wrongful actions. We must acknowledge the efforts that several forwarders and lenders have made to help in arriving at this point. We are confident that this is a solution that can be embraced by every stakeholder.
American Recovery Association
1400 Corporate Drive, Suite 175 | Irving, TX 75038
PH: 972.755.4755, Fax: 972.870.5755 | www.repo.org
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