Car Kill Switch

Driver nearly crashes when her car suddenly shut down on a busy interstate because auto lender hit remote kill switch when she missed a payment

A Virtual Repo Man

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"I have disabled a car while I was shopping at Walmart," said Lionel M. Vead Jr., the head of collections at First Castle Credit Union in Covington, La., who said that starter interrupt devices and GPS tracking technology had made his job easier.Credit Cheryl Gerber for The New York Times

From his office outside New Orleans, Mr. Vead can monitor the movements of about 880 subprime borrowers on a computerized map that shows the location of their cars with a red marker. Mr. Vead can spot drivers who have fallen behind on their payments and remotely disable their vehicles on his computer or mobile phone.

The devices are reshaping how people like Mr. Vead collect on debts. He can quickly locate the collateral without relying on a repo man to hunt down delinquent borrowers.

·        T. Candice Smith had to have her car pushed out of on-coming traffic

·        Starter Interrupt Devices allow auto lenders to 'shut down borrower's cars at any moment'

·        The devices emit flashing lights, beeping noises and then shuts down the car and prevents it from starting

·        These devices have been installed in more than two million vehicles 

T. Candice Smith, 31, and her friend were driving down a three-lane Las Vegas interstate in 2012 when her steering wheel began to lock up. The car's engine stopped and Smith's friend had to push the car to the side of the highway to avoid being hit.

Smith told the New York Times that the car's shutdown wasn't due to a mechanical failure -- it was her auto lender. 

Smith's story is similar to that of many people who have borrowed from auto lenders that utilize what are called 'Starter Interrupt Devices.'

These devices enable auto lenders to prevent a borrower's car from starting with the push of a button, according to the Times. 

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Starter Interrupt Devices: These devices emit flashing lights, beeping noises and then shuts down the car and prevents it from starting

If a borrower misses an auto payment, lenders may activate a device installed in the car in an attempt to 'remind' the borrower to make the payment.

The device emits flashing lights, loud beeping noises and may even prevent the car from starting.

The Times reports that the devices are being utilized for many borrowers with credit scores 640 or below.

The devices are said to be a way to help repair poor credit and encourage borrowers to consistently make payments on time, according to the Times.

David Sailors, executive vice president of Lender Systems Inc., one company that makes starter interrupt devices, said the devices are a 'tough love approach' to helping borrowers make their payments on time.

'We want to help [borrowers] get on their feet,' Sailors told the Times, 'but sometimes it does require a very consistent reminder and in some cases the disablement of the start of their vehicle if they haven't made their payment on time.'

Borrowers with a credit score at or below 640 are considered 'subprime,' and the Times reports that roughly 25 percent of auto loans made last year were considered subprime. This has since increased.

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Starter interrupt only: Many starter interrupt device manufacturers like PassTime and Lender Systems Inc. say the devices do not shut down moving vehicles, but prevent them from starting

The Times refers to this as the 'subprime boom' and the devices enable lenders to give auto loans to high-risk borrowers.

So, borrowers can get auto loans a little easier, but not without having one of these devices installed in their vehicles, ultimately giving lenders final control. The Times reports that these devices have been installed in more than two million vehicles.

The Times tells of lender Lionel M. Vead Jr., the head of collections at First Castly Federal Credit Union in Covington, Louisiana, who has once even 'disabled a car while [he] was shopping at Walmart.'

The Times reports that Vead can monitor more than 800 borrowers at a time via a computerized map that uses a red marker to show the borrower's locations. 

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Easy loans: Borrowers can get auto loans a little easier, but not without having a starter interrupt device installed in their vehicles, ultimately giving len (stock image)

Vead can spot borrowers on the map who have not made their payments and remotely shut down their vehicles at any time. Vead told the times that using the device 'gets [borrower's] attention.'

Though the device's purpose is to ultimately benefit borrowers, many have reported lenders shutting down their vehicles at inconvenient times.

Many state laws prohibit lenders from seizing cars until the borrowers are in default, which means they have not made a payment in at least 30 days, the Times reports. 

Many starter interrupt device manufacturers like PassTime, which Smith had in her car, and Lender Systems Inc. say the devices do not shut down moving vehicles, but prevent them from starting.

Smith told the Times that her auto lender's (C.A.G. Acceptance) use of the device made her feel helpless.

'I felt like even though I made my payments and was never late under my contract, these people could do whatever they wanted,' Smith said, 'and there was nothing I could do to stop them.'