Editorial
After having received $25B from the US taxpayer in 2008, JPMorgan Chase Bank is clearly not satisfied with profits up 9%, or $19B in 2011 and have found a new target to squeeze the dollar out of. The repossession industry. Recently, Chase Bank has sent to all of its repossession agencies a new contract that requires their signature and adherence of terms that will require of them a “match price” of the lowest rate they charge anyone as well as an increase in guarantee of payoff for vehicle damage that the agencies insurance will not be sufficient to cover.
In an unprecedented show of unity, the ARA, NFA, TFA and RSIG have all penned letters to their members advising them of the their concerns about this agreement. The AFA is reportedly in agreement in spirit, but are awaiting formal approvals to publish their concerns as well. While valiant and important that the associations make these statements to advise their members of the risks associated with this new agreement by Chase Bank, there are an estimated 4,000 repossession agencies and companies that perform repossessions in the United States, the national associations only represent an estimated 25% of them. That being said, these warnings should not go deaf to those unaffiliated with the associations.
- Will the volume make up for the thin profit margins?
- Is it fair that a client should be able to audit your records and mandate you charge them the lowest price and require you refund them the difference?
- Are you willing to risk your entire company should losses occur to Chase Bank collateral that exceed your insurance coverage?
Remember, here is a bank that needed a $25B capital infusion from the Federal Government (in other words, YOU!) in 2008, has profits up 9% in 2011 for a $19B profit and they are demanding of their vendors to assume more risk at lower prices. Gas prices are high and maybe getting higher, inflation is constant and insurance costs never go down. Perhaps it’s just me, but isn’t this all just a little counterintuitive to believe that the vendor (repossession agency) can absorb or sustain these terms?
Perhaps the survival of the repossession industry is of little or no concern to JPMorgan Chase Bank. Why should it be? It’s not their problem and they can save millions of dollars if they can get agencies to work under these terms, and I assure you, someone there will be getting a hefty bonus for pulling this off. Don’t you wish that was you? Well it’s not, you’re the people they are asking to sign your businesses away to for the “honor” of working their accounts. Lucky you!
I am sure more than a few companies out there will drink the Kool Aid. Chase Bank is counting on it. If enough of you do, you can expect to see a
lot more unreasonable contracts like this coming from the other big lenders.
I don’t run your shop and I’m not trying to tell any of you what to do, but can I ask you to put on your thinking caps for a minute here folks? This contract is audacious and wreaks of the arrogance of persons residing far from the collections and repossession process who will never have to face the companies whose livelihoods they threaten to diminish and endanger. The same kind of arrogance and shortsightedness that were major contributors to the real estate meltdown and causes for the Great Recession.
Before you sign this contract, think about it real hard. It’s your business and your livelihood you’re putting in their hands.
Kevin Armstrong
Editor
CUCollector.com
Tell them to go pound sand!!! Stand together!! Once the line is drawn we will know who crosses!
After attending NARS and hearing all the talk of unity…? I hope the industry takes a stand to the niggardly demands and makes a example of this lender.(you can bet so many others are watching) We are the ones who move the metal you can not do it on your own! If you could you would have already done so,but you can’t thats why we dont see any JP Morgan Chase tow trucks out there! As for those who think they can.. good luck to you it wont work! No volume can replace 4.30 a gallon! As you have to be a member of one of the following: AFA,ARA,TFA,NFA,RSIG,RISC We are all watching you professionals and hope you use this to come together not fall apart! Drawn the line show your unity! Time will soon tell!
Unfortunately, I was in the middle of downloading the contract from the link in the main part of this article, but it appears it has now been removed.
I do have one question about a certain set of wording that I am seeing repeated in all of the response letters that have been posted.
The paragraph I am referring to said:
“If Supplier offers more favorable pricing to any other similarly situated customer than are offered to JPMC under any Schedule, then Supplier will concurrently extend that pricing to JPMC, and this Agreement and/or any Schedule, at JPMC’s option, will be deemed amended to provide that pricing to JPMC.”
Do the words “similarly situated customer” have any standing in this?
I don’t see how Chase Auto Finance can consider themselves as a “similarly situated customer” with customers of the likes of PAR, Skip Masters, Skipbusters, etc.
Chase Auto Finance is a financial institution, whereas these other companies are forwarding companies. I don’t see anything similar between them at all….
It is interesting how people look at these topics.No! Volume does NOT make up for profits.Why?? The more volume you have,the more risk you expose yourself to! This is why you should NOT do ANYTHING for free!! Deliveries,Keys,etc.Why are you in business??? All of these costs are the cost of a financial institution doing business.What are the costs of a repossessor doing business?? Insurance,equipment,fuel,storage facility.These things are extremely expensive.You people keep doing business this way!! No,I have no problem with chase’s new contract because if it does not fit mu business model,I cannot sign it.Let someone else work for free….I won’t!! Ken
It is NOT up to people to “stand together” We already know that this does not happen…Look at FMCC!! Another that I cussed out years ago….and got calls from several other repossessors about it!! Repossessors don’t stick together because someone gets a call and sells everyone else out! Have a civilized business model.I cannot do storage at 10 days for free!! Why?? Because insurance costs money,property costs money and why should I be in business to store a banks property for free!! People that do are constantly complaining! Stop doing it and you wont have to complain!! My old employer stated to me years ago….”Ken,you NEVER do ANYTHING for a bank for free!!” Those words still ring true!! I laugh at you guys!! You are in business to make money and you sell your services down the river for pennies,then go to these conventions and complain to each other about it!! Free services do nothing but lower your profits!! More people getting shot,run over,stabbed,etc. Continue to do business this way and keep getting screwed!! I have NO sympathy for any of you!! As long as you continue to do business this way you will suffer!! Ken