A Santander slap in the face

Santander Chrysler threaten to cancel fuel surcharges

EDITORIAL

It’s a bit of a slap in the face. Inflation is at a forty-year high, fuel prices are at historic levels, almost all assignments are contingent with no fees and repossession fees have barely budged in 30 years and violence against agents in the field is on the rise. Yet, Santander/Chrysler has shown the tone-deaf audacity to threaten to withdraw their agreed payment of fuel surcharges alleging that they were supposed to be “incentives” for better recovery rates.

Last week, an email surfaced from a major national repossession forwarding company to their agent network that reportedly originated from Santander/Chrysler. It is unknown if this was sent to any other forwarding company as no one has made mention of it, but this forwarding company is to date the only one shared. Below are its contents;

“As you know, Santander/Chrysler approved $35 and $70 increases on all repossessions from April 1st through June 30th. This increase was given to help incentivize agents, and assist with combating the rising fuel cost to maintain and/ or increase recovery percentages.

Now that the first full month of the program is completed, Santander/Chrysler has reviewed the performance data. Through April, it is difficult to see any material lift in repossession performance that increased fees were hoping to achieve. While the program is in effect through the end of June, it is important that you continue to focus on improving recovery rates, as any extension of the program is conditional upon improved recovery performance. Based on the final data, decisions will be made as to whether to continue or ultimately end the program.

Santander/Chrysler’s success (and our success) is dependent upon your focus and effort, and we want to partner with you as needed to ensure your success. Please reach out to your Vendor Team if you have any questions or if there is anything we can do to help your performance.”

As I wrote about on March 17^th, surcharges are band-aids on bullet holes. Back to 2020 when Covid was raging and everyone was demanding Covid-19 handling surcharges. Many of the nation’s lenders and forwarders begrudgingly succumbed to this reasonable request. But as the pandemic ran its course, these surcharges began to fizzle. Why, because these surcharges were deemed merely temporary and everything pretty much went back to business as usual.

And here we are again, except now the problem is actually worse than it was before.

I guess they just can’t help themselves. It’s just what they do. Pinch pennies and squeeze the life out of the Golden Goose. It’s the nature the banking beast.

They don’t care about you. Its not personal, its just business and keeping expenses down is part of that. They will noy pay one penny more for anything than they have to in order to get it done.

And in that spirit, it is as all agencies should treat their relationships with lenders likewise and should not give anything more than what they pay for, which isn’t much. It’s not personal, its just business and driving your profits up is part of that as well.

The answer to survival in this industry going forward is going to be efficiency and knowing your worth. You can not outrun inflation by increasing recovery volume! Especially when your recovery fees are no better than they were 30 years ago.

As I wrote ad nauseum in April, a $350 repo fee in the year 2000 now has the spending power of $205.49. There is no magic trick or “come to Jesus” moment that’s going to change this. It requires that agencies demand proper fees. The lending world has been making billions while the repossession industry has been racing to the bottom under these conditions but its nobody’s fault but the industries for putting up with it.

It’s going to take a lot more than a surcharge to right this ship. Its going to take a will to stop accepting less than its worth. If repossession fees had risen in line with inflation over the last twenty years alone, that $350 repo fee would be $588 and I’m not even bringing up all of the other lost revenue streams. So, yes, I am going to say it again, in my humble opinion, a basic repossession fee should be $600.

But folks, I’m just a writer. You are the ones that captain your own ships. You are the only ones who can make change. And that change is deserved by your employees, your families, your industry and yourselves.

This industry is slowly dying and you owe it to yourselves and all that have lived died and labored in it to put up a fight to the death. You, as agency owners, must fight for what is right and what is deserved.

The 20-year repossession industry recession