Thursday, April 26, 2018
Business

Used car dealer's secret weapon: A GPS for the repo man

The latest trend in the used car business: Buy a car, get a GPS, too.

The twist is you may never know about it.

Car dealers — especially the ones who cater to customers with bad credit — increasingly are placing GPS devices on the cars they sell.

These devices aren't the kind you mount on the dashboard to navigate city streets. They're electronic locators, designed to help the repo man find your car if you stop paying. Some devices can even render the car inoperable until you pay up.

In the cat-and-mouse game between the late-paying car customer and the buy-here, pay-here dealer, the GPS locator is a new weapon.

The trouble comes when it's kept secret.

"They don't want the customer to know that if they don't pay, they can come find it," said Duane Overholt, an industry critic who runs the website stopautofraud.com.

Bond Auto Sales at 5755 34th St. N in St. Petersburg has been accused in three recent lawsuits of placing GPS devices on cars without telling buyers.

When customers successfully paid off their loans, they were invited back for a free "safety check," the lawsuits say. Then, employees would remove the secret devices.

All three plaintiffs, two former employees and a customer, are represented by Douglas Lyons, a Tallahassee lawyer. He said he had never heard of the practice until these cases. But, after researching it, he found that it's not that uncommon.

In 2011, the Florida Attorney General filed suit against a Jacksonville dealer over similar allegations. That case is still in court.

Car repossessions guided by GPS are so widespread the industry has its own trade group: The Payment Assurance Technology Association.

The group has a code of ethics that requires its members to "fully define and disclose" the devices to customers.

One of them, Dave Ronsky, CEO of Ohio-based Payteck, said it doesn't even make sense to place the devices secretly.

"It's just good business to let the customer know that the dealer has the ability to either disable the starter of the vehicle or locate the vehicle," he said.

That way, customers know their payment isn't optional. "That's a more effective behavior modification tool," he said.

He requires dealers he works with to sign agreements promising to disclose the devices.

Ronsky, like several others interviewed, said the devices are used in the "sub-prime" auto market. They're not going into Cadillacs or BMWs sold to people with good credit.

"It's the deep sub-prime, buy-here pay-here, consumers with poor credit scores," said Chris Macheca, CEO of Colorado-based Passtime.

His devices not only serve as locators, but also as reminders. If a payment is due, the device beeps for 20 seconds — kind of like a seat belt reminder — after starting the car.

A customer with a low credit score often is happy to buy a car with a GPS locator installed, and to sign a contract that discloses the device. Without it, he or she might not be able to buy a car at all.

Even Lyons, the attorney suing Bond Auto Sales, doesn't see a problem with that.

"I suppose if they make that kind of disclosure, we really wouldn't have a beef," he said.

Ricky Hicks, the general manager of Bond Auto Sales, would not comment on the devices or the lawsuits.

"We're trying to settle it," he said. "It was a miscommunication."

Michael Fischer, who owns GPSandTRACK in Phoenix, said the decision of whether to disclose the devices should be left to dealers.

They aren't being used to spy on customers, he said, they're a way of getting cars back if people don't pay.

"The dealers could care less what their customers are doing all day," he said.

Jon Mills, professor and dean emeritus of the University of Florida's Levin College of Law, said secretly placing devices raises "a lot of red flags."

He called it "an intrusion upon seclusion." The practice reminds him of the controversy that arose after several large rental companies were caught secretly placing spyware on computers they rented out.

"Essentially what they're trying to do there is stalk the person," said Timothy Kaye, a law professor at Stetson University. "And you don't have a right to stalk anyone."

Staff Writer Curtis Krueger can be reached at [email protected] or (727) 893-8232. Twitter: @ckruegertimes.

Comments
Focus crossover and Mustang will be only Ford sedans sold in North American dealerships

Focus crossover and Mustang will be only Ford sedans sold in North American dealerships

DEARBORN, Mich. — Ford Motor Co. said Wednesday it will shed most of its North American car lineup as part of broad plan to save money and make the company more competitive in a fast-changing marketplace.The changes include getting rid of all cars in...
Updated: 1 hour ago
Outback Steakhouse owner Bloomin’ Brands beats Wall Street forecast in first quarter

Outback Steakhouse owner Bloomin’ Brands beats Wall Street forecast in first quarter

TAMPA — Outback Steakhouse parent company Bloomin’ Brands reported first-quarter earnings of $65.4 million and a 68 cents net income per share.The locally based company, which also owns Carrabba’s and Bonefish Grill, posted $1.12 billion in revenue. ...
Updated: 1 hour ago
Why does Yelp think Asian restaurants serve cat and dog meat?

Why does Yelp think Asian restaurants serve cat and dog meat?

A strange thing happened when typing "dog menu" into the restaurant ratings website and app Yelp. It automatically generated suggested searches. There were dog massage, hot dogs, pet groomers. Also: "dog meat." But it got more disturbing. Take Yelp...
Updated: 1 hour ago
Duke Energy announces new Florida leadership

Duke Energy announces new Florida leadership

ST. PETERSBURG — The head of Duke Energy Florida is leaving his post to take a new role with the utility’s parent company June 1, the company announced on Wednesday. Harry Sideris, 47, was appointed this week to serve as vice president a...
Updated: 6 hours ago
As more emotional support animals fly on U.S. airlines, Congress eyes new ways to tighten the leash

As more emotional support animals fly on U.S. airlines, Congress eyes new ways to tighten the leash

WASHINGTON — With hundreds of thousands of emotional support animals taking to the skies on U.S. airlines, Congress may start pulling a tighter leash.Two new legislative options emerged this week to address a hairy issue for American Airlines, Southw...
Published: 04/25/18

Comcast challenges Murdoch with rival bid for U.K.-based Sky

LONDON — U.S. media giant Comcast on Wednesday offered $30.7 billion for Sky PLC, topping a bid from Rupert Murdoch’s 21st Century Fox and setting up a bidding war for Britain’s biggest satellite TV company.Comcast said it would pay approximately $17...
Published: 04/25/18
Sprouts Farmers Market to open new store in Pasco County

Sprouts Farmers Market to open new store in Pasco County

TRINITY — Pasco County will be getting its first Sprouts Farmers Market, the organic grocery chain announced Wednesday. The new store will open at the Village at Mitchell Ranch on State Road 54 and Little Road. Officials with the speciality st...
Published: 04/25/18
Circle K launching own gas at eight Hillsborough locations

Circle K launching own gas at eight Hillsborough locations

TAMPA — Circle K is converting the gas station portion of eight of its Hillsborough locations to Circle K fuel. Previously, the fuel was provided by other brands, such as Shell. The new Circle K branding also brings with it the Canadian-owned conveni...
Published: 04/25/18
Florida leads other hurricane-prone states in quality of its building codes

Florida leads other hurricane-prone states in quality of its building codes

Florida has the strongest residential building codes among 18 coastal states, according to a new study by the Insurance Institute for Business & Home Safety. Florida’s rating is 95, almost three times higher than lowest-ranked Texas. Other states wit...
Published: 04/25/18
Study: Tampa Bay homes in once ‘redlined’ neighborhoods worth half those in other areas

Study: Tampa Bay homes in once ‘redlined’ neighborhoods worth half those in other areas

Times staffRedlining’ — banks’ refusal to make mortgage loans in certain areas — still has a huge effect on housing values even though the practice was banned 50 years ago. According to Zillow, a Tampa Bay house in a once-redlined area is worth less ...
Published: 04/25/18