Make us your home page
Instagram

Federal agency begins inquiry in auto lenders' use of GPS tracking

Auto loans to Americans with poor credit have been booming, and many finance companies and auto dealers use technologies to track the location of borrowers' vehicles in case they need to repossess them. Now, federal regulators are investigating whether these devices unfairly violate a borrower's privacy. [Times file photo]

Auto loans to Americans with poor credit have been booming, and many finance companies and auto dealers use technologies to track the location of borrowers' vehicles in case they need to repossess them. Now, federal regulators are investigating whether these devices unfairly violate a borrower's privacy. [Times file photo]

Auto loans to Americans with poor credit have been booming, and many finance companies, credit unions and auto dealers are using technologies to track the location of borrowers' vehicles in case they need to repossess them.

Such surveillance, lenders say, allows them to extend loans to more low-income Americans, knowing that they can easily locate the car. Lenders are also installing devices that enable them to remotely disable a car's ignition after a borrower misses a payment.

Now, federal regulators are investigating whether these devices unfairly violate a borrower's privacy.

The auto lender Credit Acceptance Corp. said this month in a securities filing that it had received a civil investigative demand from the Federal Trade Commission asking for its "policies, practices and procedures" related to so-called GPS starter interrupter devices, which are used to disable an ignition.

Industry lawyers say the action is part of a broader inquiry by the agency into tracking technologies used in the subprime auto lending market.

The regulatory scrutiny over the GPS starter interrupter devices comes as cracks are starting to appear in the auto loan market. The percentage of auto loans that were at least 90 days delinquent increased to 3.8 percent in the fourth quarter from 3.6 percent in the third quarter, according to the Federal Reserve Bank of New York

The auto finance industry says that without the devices, many low-income Americans would not be able to buy cars that they need to get to work.

But some find it unsettling that the technology gives lenders so much control over borrowers.

"They don't need to know what we are doing — when we go out to eat, when we go on vacation," said Elias Sanchez, a forklift operator in Austin, Texas. "We want our privacy." His auto dealer didn't tell him that a GPS tracking device had been installed in his 2005 Ford SUV, he said.

Federal agency begins inquiry in auto lenders' use of GPS tracking 02/20/17 [Last modified: Monday, February 20, 2017 10:22am]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, New York Times.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. 'Road to Nowhere' is back: Next phase of Suncoast Parkway coming

    Roads

    Despite intense public opposition and dubious traffic projections, the Florida Department of Transportation has announced that construction of the toll road known as "Suncoast 2" is expected to start in early 2018.

    The Suncoast Parkway ends at U.S. 98 just south of Citrus County. For years residents have opposed extending the toll road, a project dubbed the "Suncoast 2" into Citrus County. But state officials recently announced that the Suncoast 2 should start construction in early 2018. [Stephen J. Coddington  |  TIMES]
  2. A sports rout on Wall Street

    Retail

    NEW YORK — Sporting goods retailers can't shake their losing streak.

  3. Grocery chain Aldi hosting hiring event in Brandon Aug. 24

    Retail

    BRANDON — German grocery chain Aldi is holding a hiring event for its Brandon store Aug. 24. It is looking to fill store associate, shift manager and manager trainee positions.

  4. Lightning owner Jeff Vinik backs film company pursuing global blockbusters

    Corporate

    TAMPA — Jeff Vinik's latest investment might be coming to a theater near you.

    Jeff Vinik, Tampa Bay Lightning owner, invested in a new movie company looking to appeal to a global audience. | [Times file photo]
  5. Trigaux: Look to new Inc. 5000 rankings for Tampa Bay's future heavyweights

    Business

    There's a whole lotta fast-growing private companies here in Tampa Bay. Odds are good you have not heard of most of them.

    Yet.

    Kyle Taylor, CEO and founder of The Penny Hoarder, fills a glass for his employees this past Wednesday as the young St. Petersburg personal advice business celebrates its landing at No. 25 on the 2017 Inc. 5000 list of the fastest growing private companies in the country. Taylor, still in his 20s, wins kudos from executive editor Alexis Grant for keeping the firm's culture innovative. The business ranked No. 32 last year. [DIRK SHADD   |   Times]