Trying to find a reputable and professional company to handle your repossessions can be difficult. It’s easy to just look solely at the dollar amount, but what exactly are you paying for? Especially with the advent of the Consumer Financial Protection Bureau’s (CFPB) regulations, it’s important that you know just about everything about your ‘repo man’. Violations of debtor’s rights may be committed by your third-party vendor, but you can end up with the liability because you did not do your due diligence before sending out the work. Don’t be afraid to set aside some time to review and interview a potential repossession vendor. Making sure that your vendor is fully licensed and insured is the beginning of that process. Don’t only get copies of the insurance certificates – you should have those, too, but speaking with someone about the coverage provided and licensing required will give you a better idea of how prepared a vendor is for your business.
What state licensing do you have?
Any company operating in the State of California is required to have a Repossession Agency (RA) license issued by the Bureau of Security and Investigative Services (BSIS). Additionally, each office must have a Qualified Manager (QM) with a license, and each agent must be licensed as well. Ideally, a reputable company will be able to provide you with an RA number and copies of all those licenses.
Are you fully insured? By who?
Each credit union, finance company, or bank has their own dollar amount required for third-party vendor insurance. Make yourself familiar with that number, and ask the repossessor to produce the insurance certificate with your institution’s name as an also-insured.
Have there been any recent claims on your insurance?
These days, we live in an incredibly litigious society, and the repo and finance industries seem to be particularly attractive to lawsuits. Asking about prior claims is a good indication of the quality of work your repossessor is doing: it’s relatively safe to assume that someone with zero claims is conducting every repossession in an amicable and peaceable way, with minimal problems. One or two claims may not be something to worry about, but a repossessor with an excessive amount of claims for theft or violence may be something to watch out for.
Don’t forget: open-ended questions will discourage one-word answers…the more you know, the better!