Impound Repossessions and the Risk of a Two-Tier Compliance System

January 28, 2026

Dear ARA Members,

Earlier this month, ARA became aware that a major auto finance company had entered into an agreement with a national auction and transport provider to conduct impound repossessions on its behalf. Upon learning of this arrangement, ARA sought clarification to better understand how such practices are being viewed and governed from a repossession, compliance, and risk-management standpoint.

Some may ask: What is the concern? As industry professionals know, installment loan obligations do not end simply because a vehicle is impounded or voluntarily surrendered. Deficiency rights hinge on lawful possession, proper notice, and a commercially reasonable disposition of collateral. Any deviation from these requirements exposes lenders, agents, and the broader industry to unnecessary regulatory, legal, and reputational risk. For that reason, strict adherence to established repossession procedures and compliance standards is not optional — it is foundational.

What complicates this issue further is the growing tendency to blur the line between repossession professionals and traditional towing or transport providers. Repossession companies operate under materially higher standards, including wrongful repossession coverage, specialized on-hook insurance, mandatory law-enforcement reporting, system-of-record compliance, rigorous lot security requirements, comprehensive employee training, and documented policies governing vehicle and personal property handling. These safeguards exist for a reason.

When alternative service providers are inserted into the repossession process, it is fair — and necessary — to ask whether the industry is holding all participants to the same standard or quietly accepting a two-tier system of compliance. Vendor oversight may exist on paper, but execution matters — especially when consumer rights, personal identifying information, and deficiency exposure are at stake. The lender involved has indicated that they recognize impound recoveries are still considered repossessions and has stated that the same vetting and compliance standards used to vet their agent network are being applied to the national auction and transport provider.

While ARA commends this lender for not allowing a double standard, the broader concern remains. The introduction of non-traditional providers into core repossession functions challenges long-standing industry norms and raises uncomfortable questions about fairness, risk allocation, and whether compliance expectations are being diluted for the sake of convenience or cost. ARA believes this is not an abstract issue, but one that goes directly to the integrity of the repossession ecosystem and the standards that licensed, insured, and compliant agents are required to meet every day.

Impound Repossessions and the Risk of a Two-Tier Compliance System

Sincerely,

Todd Case,

ARA President

About the American Recovery Association (ARA):
The American Recovery Association is the world’s largest association dedicated to the advancement and professional development of the recovery and remarketing industry. ARA provides compliance support, education, and advocacy for hundreds of recovery professionals nationwide. ARA is the founder and host of the annual three-day North American Repossessors Summit (NARS) — the largest repossession conference in the industry. For more information, go to repo.org or call (972) 755-4755.