Warning Issued to Repo Industry Against TitleMax Vendor Attestation

In a May 22, 2020 broadcast to the repossession industry, Mike Peplinski of Harding Brooks Insurance, issued a warning regarding liabilities created for repossession agencies agreeing to work for TitleMax, the nation’s largest title loan lender.

According to Mike Peplinski’s insurance analysis, if agents sign the Vendor Attestation issued by TitleMax, the repossession agency is agreeing to financially cover all liability to TitleMax in the event of a wrongful repossession in a territory that was deemed illegal to repossess.

This agreement appears to place all liability square on the backs of the repossession agencies and is a an unfair practice of reverse indemnification.

With the earnest desire to remedy this deficiency, Mike Peplinski agreed to meet with TitleMax to clarify the issue. Despite TitleMax’s agreement to revise the attestation to remove the deficiency, they reportedly reneged and merely attempted to revise the wording with no substantive changes to remove the agency liability.

See the memo below;

05/22/2020

RE: Contract Amendments

To the Auto Recovery Industry,

TitleMax put out a Vendor Attestation yesterday to all those that repossess for them. The letter states, they will be putting out Open Repossession Assignments to their vendors and listing the laws and guidance of each state on RepoSystems. This practice is leaving you responsible for determining eligibility.

This Attestation you are being mandated to sign to get assignments, DOES NOT WORK.

This Attestation is stating you will be held liable and will indemnify and defend them against any such alleged damages / claims / demands / complaints.

Wrongful Repossession coverage will not be triggered to extend coverage to an Additional Insured without a “VALID” assignment. Simply put, if the assignment were in a territory that was deemed illegal to repossess then the assignment would not be valid, and NO COVERAGE would extend to the additional insured. The outcome, wrongful repossession would cover the Repossessor but would NOT cover an additional insured. You the Repossessor, would be responsible to pay out of your own pocket!

The misconception in the Industry is if the Insurance Carrier says we will not give coverage than the Lenders will not ask for it. This could not be more wrong! Contracts are signed every day with expectations of the Repossessor to give coverage to the lender in instances when their insurance policy has no coverage to give.

We strongly recommend before signing this or any Attestation, you review the red flags we pointed out with your attorney. Please understand, without your insurance policy extending coverage, YOU PERSONALLY are extending coverage.

Sincerely,