Important Changes to Florida’s Repossession Law

Guest Editorial

Chapter 493 is the Florida law that regulates the licensure and oversight of those who provide repossession services as well as licensure and oversight of the private investigation and private security industries.

Effective July 1^st, 2013, some very important changes were added to this law by the Florida Legislature.  These new changes are very important to licensed recovery agents, creditors who hire the services of Florida Recovery Agents and those who service repossession assignments without proper license, including unlicensed auctions, transporters, private towers, etc.

First let us address an issue that has been a part of Chapter 493 for many years.  That issue is that Chapter 493 does not differentiate between what is defined as a “voluntary” repossession and an “involuntary” repossession.  In both cases a voluntary repossession or an involuntary repossession must be serviced by a Florida licensed Recovery agent or the employee of the creditor that holds the lien.

Example:  A consumer, no longer able to make their car payments delivers the vehicle back to the selling dealer or calls the creditor and requests they send someone to take voluntary possession of the vehicle.  According to Chapter 493 the creditor must either hire a Florida licensed Recovery Agent to take possession of the vehicle or the creditor may have one of their own employees take possession.  As mentioned, this process applies to both voluntary and involuntary repossessions.

Over the years Florida licensed Recovery Agents have suffered significantly at the hands of unlicensed entities servicing repossession assignments.  However, under the new changes to Chapter 493, the commitment of the current Director of the Division of Licensing and his staff unlicensed activity will now be aggressively addressed and prosecuted.  The Legislative Intent in Chapter 493 is very clear that repossession activity by untrained, unlicensed persons are a threat to the welfare of the public and so those individuals and entities that service repossession assignments should be properly trained and licensed pursuant to the requirements of Chapter 493.

The new language in Chapter 493 that became effective on July 1^st, 2013 now has some real “teeth” which provides for criminal penalties for unlicensed and illegal repossession activity.  This new language is found in Chapter 493.6120 which includes the following:  “Except as otherwise provided in this Chapter a person who engages in any activity for which this Chapter requires a license and who does not hold the required license commits:

1. 1.    For the first violation, a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083.
2. 2.    For a second or subsequent violation, a felony of the third degree, punishable as provided in 775.082, s. 775.083, or s. 775.084, and the Department may seek the imposition of a civil penalty not to exceed $10,000.
3. 3.    S. 775.084 addresses enhanced penalties for “habitual offenders.”

Section 775 applies to criminal violations rather than simply administrative violations.  Following is an explanation of the criminal penalties for unlicensed and illegal repossession activities:

1. 1.    Under s. 775.082, a first degree Misdemeanor carries a penalty of up to one (1) year in jail and/or up to a $1,000 fine as prescribed in s. 775.083.  In addition, the court also has the authorization to decree a forfeiture of property.
2. 2.    Under s. 775.082, a third degree felony carries a penalty of imprisonment not to exceed five (5) years and, under new Chapter 493 language a civil penalty not to exceed $10,000.

To further enhance enforcement of the new changes the Division has created a training program for law enforcement that will help law enforcement in addressing unlicensed activity and to determine when a repossession is complete under the law.  It is very clear that, under the new penalty provisions of Chapter 493 and the intent by the Florida Division of Licensing that unlicensed and illegal repossession activity will no longer be tolerated in Florida.  I would encourage any entity that is involved in the repossession process in Florida to contact the Division and obtain a copy of the new language.

After being involved in the Legislative process in Florida since 1985 and several other states over the past 10-12 years I have an opinion about laws.  A good law, in my opinion has three essential ingredients; it must be minimal, sensible and effective and to be effective it must have sufficient penalties to deter the acts it was designed to prohibit.  For many years Chapter 493 has been minimal and sensible, largely because Division Directors have invited the industries it regulates to be a part of fashioning this law.  And now, under the current leadership of the Division we have the third essential ingredient, effectiveness.

There have been many Florida licensees over the years that have lobbied for the changes we now see and there were many involved in developing and lobbying for these changes in 2013, and those of us in the collateral recovery industry in Florida should be most appreciative of the results.  However, without the leadership and cooperation, and encouragement by the Division it would very probably have been back to the drawing board for another try next year.

At the end of the day the success of what has been accomplished by the new language will depend upon Florida licensees working with the Division and law enforcement to aggressively seek out and report unlicensed and illegal repossession activity.  We, as Florida licensees have been given a unique opportunity to clean up our industry here in Florida and we now have the tools (Division and law enforcement) so, let’s get to work.

Be safe,

Joe Taylor

RISC