CALR Condemns Illegal Repossession Practices

CALR Statement on Illegal Repossession Practices in California!

CALR remains fully committed to protecting the integrity of our industry and calling out any flagrant violations of California law regarding vehicle repossessions.

California is the only state in the nation that mandates a comprehensive licensing structure for repossession operations.

This includes a licensed Repossession Agency (RA), a qualified manager (QM) to oversee recovery operations, and Repossession Agency Employees (RAEs). All must be licensed. The strict requirements under Consumer Affairs exist to protect the consumer, and govern the repossessor to ensure professionalism, accountability, and public safety.

Unfortunately, we are increasingly aware of bad actors, particularly in major metropolitan areas, engaging in unlawful practices. Some entities are conducting repossessions—particularly of voluntary surrenders and impounds—without proper licensing. These actions not only violate state law but also undermine every legitimate recovery professional in our state.

CALR has received complaints from consumers who cannot pick up their personal property after their vehicle has been repossessed by an unlicensed company or uncompliant auction or operator.

Disturbingly, some lenders and clients are attempting to bypass licensed recovery agents by hiring companies such as Copart and other unlicensed auctions to secure collateral. This is not only illegal, but it is also a direct threat to the standards we all uphold. I have personally witnessed a case where a vehicle our agency located at a body shop was later recovered and closed out by another, unlicensed party—an alarming breach of protocol.

CALR members shoulder the highest operational costs in the nation, from insurance premiums and fuel prices to real estate and compliance expenses. We follow the proper legal and ethical steps to become licensed and ensure our drivers are qualified and credentialed. It is unacceptable that unlicensed operators are allowed to skirt these obligations.

CALR strongly condemns the practice of lenders and forwarders using unlicensed auctions acting as repossession companies. These entities are not filing the mandatory paperwork required by state law and are operating outside the boundaries of the legal system.

We urge all lenders, financial institutions, and forwarders to reconsider any engagement with unlicensed recovery providers. If you encounter questionable practices or operators, please notify any member of the CALR board. We are prepared to leverage all available resources to investigate and halt illegal activity.

This industry is regulated for a reason. Let’s uphold the standards we’ve worked so hard to build.

Michael Farhood