#243 - What Your Repo Guy Wishes You Knew

All right, Jeff, before we start, we got to talk about something super important. You know what that is?

Safeguards.

Safeguard rules. So this thing's coming up quick. The end of October, it goes into effect, and we have to be compliant by December 9th. And luckily, the folks at Tiada have a course that's super simple I've taken. Hey, Jeff. If I can take it and pass it the first time, it's got to be easy, right?

I think so. It's like a. A driver's test. You know, I keep. I keep putting it off. I've got the tab open on my. On my browser, and I just leave it there, and I. Eventually, I'm gonna do it.

It's gotta. That's right. You gotta do it. It's dealer education portal dot com. And it's not just for you. As the. As the primary principal dealer, your folks that work in your office have to have this, too. And the cfpb, they're gonna be on this hot. The FTC is gonna be in this hotel. So go to Tiada's portal dealer education portal.com, get registered, take the test, get everybody in your office registered. It's got to be done by December 9th. They've got the documents you need, the support you need. They're the place to get it done. Right, Jeff?

Right. Here we go. You are listening to the Independent Dealer Podcast with hosts Luke Godwin and Jeff Watson.

Hello, and welcome to the Independent Dealer Podcast, brought to you by Buckeye Dealership Consulting. Today we are discussing all things repossession. We have Patrick here. He hosts a very popular podcast called Repo America. I've listened to a couple episodes, actually, and we got him to come on and talk to us about the repo industry. Pat, thanks for joining us.

Oh, you bet. Thanks for having me. I listen to some of your podcasts, too. They're really well done, mostly nonsense, and.

It'S just a lot of me trying to. It's like herding cats with Luke. I just try to keep him on one track mind and keep his thoughts going in the right direction. But, Pat, to introduce yourself to the community, where are you at? What do you do? And. And how are you helping the repo community?

Okay, well, I'm in Daytona Beach, Florida. Back in the 60s, my dad got in the repossession business and formed a repossession agency called Falcon International. For many years, we operated throughout the state of Florida. He also started and operated a national trade association called Time Finance Adjusters, and my sister and I helped him Manage that for many, many years. And about three or four years ago, TFA merged with another trade association, the American Recovery Association. So I've been on the boards for, on TFA and ARA as far as well as some state associations for the repo business. So I've, you know, I still operate a repossession agency here in Daytona. The Falcon's still busy going hard at it. Not now because of the hurricane, but in, in general. Yes. So. So I'm up to my neck in the repossession business, like it or not.

Yeah. I'll tell you, I've been up to my neck in, in the repossession business now for about 24 years, and I, I don't. I, I don't do them myself anymore. And, and thank goodness. But I, I remember getting your. Your dad's book in the mail. That's how old I am now. And I knew exactly where it was in my desk. Whenever I had a skip. I looked through there, found, you know, found one of those people who remember that association and gave him a call. And I tell you, it's. It's helped me recover cars all over the country. So that was a great thing that your dad did.

It might be good to find out from your members what are they doing nowadays as far as assigning skips, because they're still.

I wanted to ask you that, Pat. So as a repo, as a, as a finance company to buy here, pay here. We'll just jump right into it.

Yeah.

Where, where is that? Where is that Rolodex or where is the yellow pages of repo companies? Because we get it all the time in the forums. People are like, hey, you know, I've got a skip down in South Texas. Does anyone know someone that'll pick something up? Like, where should we be going? I mean, the dealer to dealer network's great because if you do find someone, you get a real solid referral of a great repo operator. But outside of that, where do we go?

Well, I would say a few things. One is your local repossessor might know somebody. If he's a member of an association or a network, he might know somebody in South Texas that would handle that for you. And outside of that, I would use the American Recovery association. Their website is repo.org Again, I was on the board. I'm not any longer. I'm just a member now. But these would be people that have gone through a pretty exhaustive training. They'd have a good understanding of the laws regarding personal property or The CFPB compliance issues, they'll be a little bit more expensive than somebody you might find just randomly off the Internet. And sometimes you. I'll see a post on repo, some repo Facebook page, hey, I got a repo to place in, you know, down in Mississippi. I just think that's unwise. I think there's. If you think about the repossession process is the most invasive collection practice allowed in America. I think it's, you know, I cannot believe that the government still lets us do it, but they do. We're in somebody's driveway, you know, at 2 in the morning. You know, there's been. It's just still extremely dangerous. There's a lot of federal oversight. And what we're doing just to hire some random guy to save a hundred bucks, to me seems foolish. But that's.

Let's talk about. Let's talk about that random guy. What. I mean, you. Everyone knows you get what you pay for, right? And we all kind of shop around and I'm sure all of us dealers have been burnt by the bargain, right? We find some guy across the country that's the cheapest rate to pick up a car, and it just becomes an absolute nightmare. What are some of those signs? Or what would you tell dealers? Or, like, some key indicators that you're either dealing with a unreputable company or a reputable company. What are some of the, like, upfront indicators that would let us know whether or not we're going down the wrong path?

That's a great question. Again, seeing some of their compliance documents at this stage, the way America is right now, everybody is, you know, we're under the oversight of the cfpb. A lot of your agents should have compliance documents. They should have training. There's several different training resources now that repossessors can avail themselves of. One's called risk, and one's called the CCRS program that the ARA administrates. You'd want your guy to at least have a basic understanding of the Uniform Commercial Code, the laws of the state that they operate in. A lot of these associations require site inspections that would require that the agency has, you know, certain security measures in place to protect the vehicles while it's in their possession. I would say the safest route, again, would be unbiased, but would be using someone in one of the trade groups.

And, you know, Jeff, we. We talk about how important it is for dealers to be in trade groups, and I, you know, it makes total sense that you would look at a Trade group to find the most reputable person. Right, Pat?

I think so, but yeah, that's. I think so. But you mentioned Luke, when you used to get the tfa, I'm sure you had some less than positive experiences with the, even the agencies in the association, but I think by and large, by and large, they're your safest Avenue 100.

Yeah.

Sometimes I look at the. If I'm going to hire a repo company out of the area, I'll look at the Google Maps and look at their location and say, okay, is this a location that I feel is professional secure or is it like a double wide trailer behind a 711 or something where.

Yeah.

And the other thing is, is the assignment process. I found that if they have a website that at least has a form for assignments. But if I call someone and I'm going to give them an assignment and they're like, well, can you fax that over or can you send me a carrier pigeon with the key copy of the title? I'm like, oh no, no, no. Back to train up.

Yeah, you know.

Well, there are. If one of your members of your association has lots of assignments, there is a platform out there called rdn and again, I've. I'm not associated with them at all. It's. But it is like the standard management platform for the repossession industry. And we get a lot of assignments from dealers who are. Have a signed up with RDN and is that drn? No, DRN is different. Dr. Is the camera company and they are. They have some similar ownership or they did drn rd. And I know all this Alphabet soup can be a little bit confusing, but Dr. Would be another thing we should talk about before the end of this podcast for sure.

But RDN is the interaction platform where you assign it to a specific. You assign it to RDN and they ship it out to a repo agent or they are for.

No, no, they're not a forwarder. They. They just allow you to communicate with all the forms and whatnot. Again, ARA and the other trade associate, which is Allied Finance Adjusters, you can go online and type in an assignment and send it that way too. But you're. It's funny like, like who faxes anymore or who even calls? I know a lot of the millennials don't even want to lift the phone. They'd rather just text you the assignment, you know.

Yeah. If the repo company has like a repair shop or a gas station attached to it, it's probably not someone you want to.

Yeah, yeah.

The RD RDN network. Can we stay on that for just a second, Pat? That's recoverydatabase.net right?

Yep. How.

How many. How many repos should you, you know, could a company be doing a month before they need to look at something that size?

That. That would be. It's hard for me to say. I've never been signed up as a client. They're very helpful. It's a very helpful group. They are somehow loosely affiliated with the Odessa Auction Network. It's. There's some parallel owners, I believe, but I would say if you had more than a handful a month, it might be helpful. Just because you get your. Your updates, you get photos, you can send them documents through rdn. Let's say the repossessor wants a copy of the conditional sales agreement or for whatever, or you want a photo of the vehicle or the property or whatever. All that can be handled through rdn.

Interesting. Yeah. I think the repo company we use locally has us go through RDN to submit everything, and I don't know that we ever signed up with them. I'm not sure. But I'm pretty sure that's how we interact, because you'll see it. All those forms are the exact same, and you kind of, you know, there's a. There's a template that you'll know you're going through them with these repo companies. And so the other one was dnr. Do not. Yeah, I feel like that's most of my repos.

Yeah, that's. And that's the repo industry right there, too. DRN is a network of cameras. These LPR cameras, plate hits. And that's, again, a big thing in the industry, for sure. That's.

I was running people down.

What's that?

Yeah, I was in that platform this morning running people down.

Because, Luke, you're. You bought a subscription to that, right?

I do. I have a subscription to drn. And it's. It's helpful sometimes. What do you think, Pat? I mean, it's, you know, it's one of those things. It can be or it can't be.

Right? Yeah. Or. Or, I mean, we've had clients or we've bought hits off of drn, and then you realize, oh, it's, you know, Walmart parking lot, or it's going down the interstate, and that's not helpful. You know, you wish there'd be some more training for the camera operators. Don't turn these things on if you're. But. But the thing is that there is a. Hoping to get, like, an immediate hit. Like they're hoping that, that they spot the car and they can at Walmart and they can jump out and hook it up and go. Whereas to feed that information into the network doesn't help me. I mean, the guy's. The shopper has gone home to wherever his home is.

And so, so I got a question. Can you, can you actually like, for, for those cameras? Because I've always wondered this. Can you say, okay, I'm looking for this license tag and if anybody spots it, can they repossess it right then? Is that how that works, Pat?

That whole. Again, we don't operate cameras and their whole business model has shifted. It used to be you spotted it, you get the car, and that was cool. And that was probably the preferable way to do it. But now all these repossessors and camera car operators are feeding all this information into rdn, drn. I got drn. And if you're not signed up with the client or the client's forwarder, then you, you were supposed to get paid for the hit, but you don't repossess the car. And so that caused a lot of anguish in the repossession industry where, you know, you might be providing the client with the information to repossess the car, but you're not getting paid for it. You're supposed to, and presumably valuable part.

Of it, because you spend a lot of money on the cameras and you spend a lot of time, oh, yeah, trolling parking lots trying to get plate hits.

Well, the. If you hit it, you're supposed to get paid something. And I'm not sure that's happening anymore. You have to talk to them as to what the current business plan is.

So these guys are out trolling because I know, like our local repo guy, he set up like a small little Ford Focus back in the day.

Yeah.

And he would just, he had. He paid a guy to just drive because he didn't want to take his big truck out and put useless miles on it. But he would just drive until he got a plate hit and then he'd call his guy and his guy run over and snag it.

They still do. They'll often, these repo agencies will outfit a Prius or a little Corolla or something, a drone and, and pay a drone. That's going to be great. And then just send a driver around. And with the price of diesel fuel right now, which is super insane in certain parts of the country, it doesn't make sense to send the repo truck out to do the scanning. The scanning's done with cars generally anymore.

So let me ask this, Luke. Why would you subscribe to a plate hit service instead of just sending this to the repo company and let them subscribe to the plate hit and do the work? Why are you doing the footwork for the repo company.

Has different. DRN has different uses as well. So if it's, say the car stolen, I get immediate information on that. If it's impounded, you're supposed to get immediate information. It's not as. It's not as good, but I mean, we do some of the. We do some of our own skip tracing as well. Just find that sometimes by us doing the skip tracing, we care a little bit more than other skip tracing companies.

Okay. And so it's maybe more of a quality and, and speed of information. You could know by an hour where that person is or if there's a hit or if they're out of town or something, as opposed to sending to a repo company. It might take them a week to get around to working it.

Yeah. And so sometimes, I mean, sometimes, unfortunately, GPS stop working for typically install issues, and so it stops working. So we need something other than just the GPS to, To try to locate sometimes. And that's. Yeah, that's. I mean, that's what I use it for.

You know, Pat, let me ask you this then. When we talk about GPS's, GPS, GPS, do you, when you see one of those assignments come across and it's got the link to log into the repo company access of the gps, is that like Christmas? I mean, is that just like being handed a candy cane? Like you're like, yes, thank you. I will click on this location and I will go straight to the car, pick it up, and have it back here before lunch.

Well, let me ask you some questions.

Hey, everybody, Buckeye Dealership Consulting, a great sponsor of the podcast. Be sure to get your reinsurance company going. We're in the fourth quarter now, Luke. This is a great time. If you haven't already done it, reach out to them and start exploring your options to set up your own reinsurance company.

Yeah, there's so many options, and we even talked about with repossession, that you can set up vsi, all these different products that can help you with those repossessions when they do come, because repossessions are coming. You know, reinsurance isn't just for warranties and Gap and this thing. It's for all other products that, that Buckeye can help you with that really can. Can help you hedge those losses that are coming. Yeah, yeah.

And you put your own gap product on there. We know that's smart. But putting a service contract on there is even better because a lot of these repos aren't just because the person's not paying. It's because they can't pay and fix the car. So if you've got a service contract, you're helping them insure against future breakdowns was just a win win all the way around. So give them a call.

Why is this. That car have a GPS on it? There's something about the consumer or the customer that led the, the dealer to say, wow, this is this guy. This consumer might be a problem. You know, they, this isn't their first rodeo. They had a repo. So I'm gonna put them in this car, but I'm gonna put a GPS on it. And also, you guys know from experience, GPS is, is good. It's close, but no cigar. It might, you know, the car might be behind a fence, it might be in a garage. I'm not certain right now the accuracy of GPS information as far as how, what the range of it is. It used to be not a few years ago was. It was in a general.

It's really good now.

But still the thing that irritates repossessors. And I heard, I spoke at a conference of independent dealers a few years ago and the question came up, well, shouldn't GPS repossessions be cheaper? Shouldn't we pay the repossessor less because we're providing with the whereabouts of the car? And my answer was, okay, I've been in this business for 50 years and the rules of the game have always been, Mr. Lender, you do the best job you can telling us where you think your customers, and we'll do the best job we can trying to get the car without getting killed. And although. So GPS does simplify the skip tracing aspect. You mentioned skip tracing earlier, Luke, is kind of a big part of what you do. It does prevent you from having to go to a skip tracer to get the information about the car, but doesn't. It doesn't turn bullets into marshmallows. And that doesn't make the consumer any less of a problem at 2 in the morning in the driveway. It doesn't make the repossession any safer. So. And again, there's reasons why that there's a GPS tracker on that car in the first place. And that might be sort of an indicator that this customer might have Been problematic or other things. So that's. So yes, it's. We appreciate it. We get a lot of information. We'll get like from clients. Okay. This is the gold star log information. So you, this will tell you where the car is. And that's helpful, but it's not as helpful as some of your dealers might think it is.

Well, I, you know, I was thinking.

That.

Answer this because this has been something that bothered me forever. Is a repossessor repossession company a skip tracer as well or not?

Boy, you guys are asking great questions. Back in my dad's day. I'm sure everybody hates hearing that back in the day, but back in the earlier times of the repossession industry, a lot of the repossessors were private investigators. I'm a private investigator. Our agency has a, in the state of Florida has a, an A license which is, which is a private investigation license. And that allows us to access databases that a lot of non investigators don't have access to. Or there's information within some of these databases that they'll provide to us, but they won't to repossessors. I won't mention some of the database names, but we as a private investigator, I get more information from databases than a repossessor would. With that said, with the introduction of these cameras, the entry is sort of been pushed into just being, you know, like you used to wear drones. We got these drones running around, you know, with these camera cars and then they, then they'll call in for air support when they find the car. And so the repo guy in the truck runs out and grabs it from a camera hit. That's a, that's way different than what the way it was back in the earlier years where we were responsible for trying to relocate the customer.

Yeah, knocking doors, talking, knocking doors.

And agencies like Falcon and, and there's lots of us still out there will do that. And I think it's important. I, you know, the most important information you're. You're going to get is are our boots on the ground people visually seeing the neighborhood or you know, carefully talking to neighbors without violating their rights to privacy and all that stuff. That, that all that is priceless compared to even what you might pull up on a, like a, you know, a database hit, you know, so go ahead.

Is it me? Is it makes sense for us to hire private investigators? Because I've been thinking about this lately. Is there any. If we have a repossession guy who we don't feel like is doing, getting the job done. Maybe he just, he's not a private investigator.

Whatever.

I mean, is there, is there value in companies who have skips that, that we can't find and hiring private investigators?

Well, there are good skip companies out there and they, rather than hire a one off private investigator who would charge you, you know, so much per hour. There are skip companies that do like, do it, take on a Skip for like 350, no hit, no fee type of thing. Some of them are good, some of them are bad. Some of them, when the repo agency gets an assignment from these skip companies companies, there's a big eye roll because they're doing the best they can, you know. But this, like I said, sometimes nothing beats actually being, being there at the address.

Yeah, we have one that we use on the rare occasion two, three times a year. And I won't say the name because I don't want you guys to flutter. And then she won't be able to get to my stuff. But she's really good at finding it. And I haven't figured out how it is. I think it might be some sort of like Publishers Clearinghouse like letter that she says and that like, you know, gets them all to show up because they think they want a free tv. I don't know how she does it, but she does it.

Have we had her on the podcast yet? Interview at some point?

No, no, I, I don't think so. But, but like you said, Luke, I think in the past, and maybe not for the last couple years, but I think going forward these repo companies are going to be so busy with the low freight hanging fruit that you're right, I drive that address once or twice and if that customer is not there, I just literally don't have the manpower the time to dig deeper because I'm getting so many assignments. I'm just snagging the GPS hits the low hanging fruit. And I think we might get back to that point, you know, depending on how this economy keeps going. And we can talk about that later. But what do you think about Pat? Maybe we can talk about that. The self help repo from a finance company or buy here pay here dealer. How does the, how does the repo industry look upon that? Is it like, hey, there's plenty for all or is it like, hey, you guys are stepping into an area that is gray in most states but you get away with it. How are we looked at?

We being the dealers or we being the repossessors?

Me being the dealer. Yeah. Me being the buy Here, pay here dealer doing a self help repo. Is that kind of like a, you know.

No, no, I think, you know, as you know, it's written into the Uniform commercial code, Section 9, that it's within your rights to do that. I think, I think people recognize that having a cost effective means of getting your collateral back means that more consumers can get loans. I don't think the state or law enforcement at all has a dim view of the repossession process on its own.

What I worry about is if is, is the self help buy here pay here dealers are the ones doing the repos in the wild west, right? They're, they're doing crazy stuff. They're cutting fences, they're jumping poles. They don't know all the rules or they don't care. I remember me, you know, not to confess too much, but back in the day when I used to do my own, it was me and my buddies in a car on a Saturday night and it was fun. And they. Yeah, we have all sorts of wild crazy stories that like, I look back now and I'm like, that's, that's freaking insane. Why would we put ourselves in that situation? Yeah, wouldn't catch me doing it. I wouldn't do my own repo now for anything.

Oh, just. It's crazy to think about all the crazy stuff we all did back in the day. Or I mean, I'm, I'm afraid, even share some of the stories that some of our agents would have done. All that's behind us now though, for the most part. And again, just hitting the same note, unfortunately, if you're these trade associates, trade association members, in order to be part of the association, there is ongoing training about. Well, one of the things you mentioned, breaking a lock, you know that there's a lot of case law about what's considered a breach of the peace and breaking a lock or even lifting the hasp on a gate. It's very, it's getting very technical there. So you think about all the attorneys out there that are litigating so many repossessions. So there's lots of case law developing about the real nuances of. Like you said back in the day, a repossessor would call a customer, say, hey, you want a television site? Make you run on down to the local Sears store and pick it up.

And box them in and.

Yeah, or just wait for them to pull in the parking lot and then leave the car idling with the keys and you just jump in and go. Stuff like that. I mean there's a million stories like that.

Electronic repossession is a new issue too, right? I mean, not new. You know, ignition shut offs have been around for a long time, but that's becoming a real issue. Right. I mean, even with Florida recently, I read somewhere about, I don't know if it was these buy here, pay here dealers that were either told or they made their own decision to unlock, you know, uninterrupt or reinstate every single starter interrupt that they had out there because these people need their cars to get out of the way.

That was a, that was a ruling from the higher ups at Pastime that thought that that was the right thing to do.

Oh, okay.

Yeah, so that was.

Yes, that's funny. The new head of the Consumer Financial Protection Bureau got him Chopra. He has got a particular bone to pick with starter interrupt devices and stuff. Like if you. He had a history and we were tracking his installment as the new head of the cfpb, but he has a sort of a, a history of having a, some heartburn over that particular process. And I heard on your, one of your previous podcasts you had an attorney on or something that they, other people have stopped relying so much on starter interrupt devices and still relying on GPS tracking, but not the interrupt part of it so much. And I can imagine that, I can imagine that too being problematic of sending one. Have having one of you guys call me, say, hey Pat, there's a customer down in Orlando and the car is disabled in the guy's driveway. Will you go get it? So go down there. He's mad as heck and he's had a few beers and sitting on the hood of the car with a shotgun across his lap waiting for me to show.

I mean that's the way I look at it. Your car off. I'm gonna take it. Like I'm not gonna shut it off and leave it there for you to mess around and start digging underneath the dash.

Yeah. Or you show up in the thing sitting on blocks and the guys wheels and tires are gone. This, this, you know, the stairs gone. It's, it's, it's a tough deal. Yeah.

I think good operators use the, use the interrupter device to elicit a reaction as in a phone call. It's not something we necessarily, necessarily use in the, in that, that process. And I promise you, you turn the car off, typically they call you and that's all, that's all I'm looking for if we do that.

Well, again, this previous podcast that you guys had, the guest was saying, really, we Want the money. We, you know, the customer can make a payment and the repossessor kind of knows that, that they kind of know they're maybe being used to roll a big, you know, ninety thousand dollar tow truck by the customer's house to freak them out and go oh man, the repo guys here, I better make payments. But just be mindful, that's sort of a, a dance that we're doing with our client dealers that we don't simply use your repo agent to scare the consumer into making payments.

Well, that's why a lot of these people come in is they have closeout fees. Right. You know, they'll have a closeout fee because they've done some work.

Yes.

And, and then they don't always know if their drive by got the customer to call you and get current or at least get back into communication. But for whatever reason you're canceling that repo. And you know, and you're often canceling.

The repo the afternoon after the guy had repo guy driven through the neighborhood. There are certain neighborhoods, you roll a repossession truck through it and you see the people start running around, running into the house. There are some neighborhoods that are very target rich environments for the repossession business. So they know, I mean a lot of these neighborhoods would know that, you know, the, there's a repo guy and up and down the street somebody.

Luke, under what situations do you ever do your own? You've got to roll back. Do you ever pick up your own?

For, for 20 years we did, I mean for 20 years we did our own. Maybe for 25 years we did our own. I, not anymore. No, I, I don't. Two things. My life is worth more than, than a car and, and also my dad's life and anybody that works for me is way worth way more than a 10 or $15,000 car. So no, we don't do them anymore. And it just, it doesn't make a lot of sense to me when it doesn't cost that much to have someone who's licensed insured so they do for a living just to do it. Because I'm not licensed and insured to do that even. I think it's even in one of my, my garage policies that we, we are specifically banned from doing the repossession.

Yeah, I think, I think a lot of buy here pay here dealers think that their car lot insurance would cover them in the case of a repossession gone wrong. And that's not the case.

And, and Also, as I recall that you're not able, if you do a self help repo, you're not able to charge the consumer for that. Repossession. I think, don't quote me on that, but I'm pretty sure that's the rule there.

For me it's if a repo company picks it up and takes it to their yard, they're that first line of interaction when the customer comes and wants to get their stuff out. So for me to not have to deal with that hot case, that's worth 350 bucks to me every single time for that customer to go there, I'd have the repo guy have to meet them to get all their crap out and hear all the flack and deal with that. I don't like those people, people rolling into my place.

That's one thing. That's another thing I wonder about is, is there a federal law or is it state by state when it comes to how long you're supposed to keep the belongings that were in a car? Because I have people that never show up for the piles and piles of junk that are in their cars.

Well, certain states have defined how long you're supposed to hold this stuff. And by the way, the handling of personal property has got to be the biggest nightmare in the repossession business. I mean, if you talk to a lot of repossessors, yeah, repossessing the car is hard, but the personal property handling is the biggest nightmare. And for a bunch of reasons, here in Florida, we're obligated to hold on to the personal property 45 days after the consumer has been notified by certified mail of how and where they can get their property. Similar laws exist in several states. And I think for the most part they would, you know, attorneys or the courts would look at some of these states and say, well, that's, that was reasonable. That's what the repossessors should have done. Like it's defined, I think in Illinois, California, Florida and maybe Texas, how long the property is held, where was I going with all that? Just, just, just that we have to, we have to hold the stuff. And think about it, some big volume agencies, like, I've got a friend of mine that has an agency in Houston, Texas, they, they probably repossess three or five hundred cars a month. And so, and they're supposed to hold this stuff for, you know, essentially a month and a half at least and probably more. So they're always storing hundreds and hundreds and hundreds of cars worth of property. And like you said, A lot of people don't come. It's everything from a, a box of Kleenex and a rosary beads, from a rear view to a whole van full of tools. The guy was a plumber or something. So they have their, their, their. They own and operate warehouses just to hold all this junk. Some of the, the personal property itself is dangerous with the fentanyl and needles. And some of these cars that come in are almost like biohazards.

Yeah, we've all found needles in our repos.

Yeah. And it's a lot of time involved. You got a bag and tag. A lot of states require that you do a complete inventory of the cars. And, and the personal property has to be stored in a certain fashion. It's, it's, it's just, it's a mess. You know that.

I mean, that seems a bit of a, a heavy burden for, for the repo person or the dealer, don't you think, Pat?

Yes, and it's, it's, it's massive. But if you think about it, there's again, a lot of case law that does separate the repossession of the vehicle with the handling of the personal property. So there's a, a moral and a legal obligation to do that. There is. There's been a bunch of discussion back and forth over what the CFPB wants us to do about charging for the property. I don't know if you guys are aware of that or not, but for years, throughout the history of the repossession industry and the state of Florida allowed this as a side note, as well as the state of California, that we were allowed to charge the consumer a reasonable fee for the handling of the personal property. The state conceded that it was a legitimately incurred expense. They allowed us to do that. And then the CFPB looked into that. And I think in starting in 2016, in a series of. They issue what's called supervisory highlights. I think it's their opinions on this or that or what they would like to see done. And what they said, what the CFPB said was that they did not want the repossessor to withhold property if the consumer refused to pay. Now, that's confusing. It's a little bit vague. Doesn't say you're not allowed to try to collect, doesn't say you're allowed to make an attempt to collect money. And, but if they refuse to pay, you cannot refuse to give it to them. And the CFPB added, we feel I, I've got to get my word incorrectly. I'm not going to get it.

Right.

Right. They said that the expenses associated with the handling of personal property should be charged back to the lender and should be added to the loan balance just like other collection related fees. Now, a lot of lenders have balked about that. Some have just arbitrarily raised repossession fees or allowed a flat rate personal property handling fee. A lot of big lenders have done that. I have some issues with some of that. But so there is, there's been a lot of tussling back and forth about the handling of personal property.

We always found like we're, we're damned if we do, damned if we don't. Like, if I pull all their stuff out and bag it, then of course I stole something or something's missing and if I leave it all in the car, then they're bound to tear all the shiz out of the car that's attached to it. The stereo's gone, the speaker's gone, the battery's gone, and I gotta sit there and babysit them while they clean out, you know, 15 trash bags full of freaking diapers and McDonald's rappers.

And can you imagine if you have an agency that repossesses three or five hundred cars a month to have staff out there, you know, watching over the customer, getting their stuff or whining about the, how they were mistreated by the lender? I mean, it's, it might be an hour of babysitting on each repossession out in the storage yard.

Yeah, we, we've seen that so many times. I can't even. Because we, we don't touch it. We leave it in the car for a certain amount of days and then, then if we're going to, whatever we're going to do with it, we will bag it at that point. But as we talk about. How many times have you've had. Well, I had $500 in the car. I had this in the car. I had that in the car. Our standard response is valid, valid police report. Because by winning lottery, we didn't steal anything.

Right, Pat, what's the biggest threat to the repo industry right now?

All right, guys, one more time here. Talking about some gps. This is the way to go with, with a repo episode, right, Jeff?

Yeah. I mean, we can't talk repo without.

Talking GPSs and pastimes. Our choice for GPS.

Yes. I use Pastime Wireless in every single car that I sell, regardless. High, low, sideways, left. I put one in there because it's a peace of mind. Right. And when it is time to pull the trigger and repo the car. I know my repo guy really appreciates having a GPS and maybe a spare key. I stopped doing the spare key thing, but if it has two, I'll typically keep one. Give it to him. He cuts a couple bucks off the repo if I got a key, and he cuts a couple bucks off the repo fee if I've got a gps. So you can use those as a leverage.

Yeah. Super important to do it. It protects your asset, protects your portfolio. All these things are good. Pastime's the way to go. And make sure. Jeff, there's a. There's a deal for people who mention us, right?

Yeah, yeah, yeah. So if you go into the show notes and you. You get one free unit when you order your first five. So that's for new customers that are switching over to GPS or doing it for the first time. Make sure you use that promo code. I think it's one free when you order five or order ten. Something like that. Order ten anyways. Yeah, you'll get a free one. Like, where's the pressure coming into you guys that. That you fight or that could put you in a disadvantage.

Well, what I've understood that through the pandemic, about 25 of the repossession agencies in America have shut down. A lot of that has been profitability back in. Back in the day. Gosh, I wish I could not quick keep saying that, but back in the day, we could charge storage for the vehicle. A lot of the lenders don't want to pay storage or they want 20 days or 30 days free. And lease payments have skyrocketed on real estate. The insurance requirements and costs to ensure all these cars in storage has skyrocketed. What used to be a revenue stream has been choked off. Fuel prices has. Have blown up. You know, I think diesel fuel in parts of the country where is over what was over $5 recently. I don't know what it is currently in some of these states, but so to work an account, just think some of these guys will spend, you know, $10 or $20 just to check an address. If it's way out, Human resources, those expenses have blown up too. I just think it's just there. There's just a lot of pressure coming from an increased expenses. And repo fees have not gone up. Lucas, or one of you guys mentioned paying 350 for repossession, which is fine. It's kind of sort of ish, the going rate. Ish. But back in the day we could charge for line items. Let's say we did made, you know, 20 trips out to heck and gone to check your address or we had to hire out a expensive rollback to bring in a, you know, piece of collateral. All that was billable. But now a lot of these clients have really compressed what they're willing to pay. And a lot of agencies are just like, they're, they're, they're punching out and they go, this is, this ain't worth it.

But whose fault is that? I mean when you, when you say that, you say that's all these agencies are willing to pay. So you're talking about like the big guys, the heavy volume type lenders that are setting those rates, you know, and saying, hey, we're only willing to pay X. And then what happens as a repo company, you're like, well, I'm not going to take your assignments then. And some other guys, some small operation jack wagon steps in and starts taking them. Is that like kind of you guys are fighting to the bottom dollar?

Yes. It's almost like the Walmart effect. There's stories out there where let's say you built your business. There's a story about some company that built their business providing, you know, canned pickles to Walmart. And so Walmart is this great customer. They're buying all your, your product at some point. Walmart, since they represent so much of your business. What you used to say, I want to charge $3. Well now Walmart said we're going to pay you two. There was a time before the, all the consolidation of banks, there were thousands. And you know, Luke was talking about how we used to send these books out to, to creditors for them to use repossessors in the TFA guide. Well, there was like regional lenders that would do auto loans, local banks. Well now most of all the auto lending for, you know, prime lending and maybe some subprime lending, it goes through just a handful of lenders. Wells Fargo, Santander, bank of America, Capital One, Chase, they command so much buying power, they dictate what we can charge. It's no more the case. What do you, Mr. Repo Agent, what do you charge? It's like, Mr. Repo Agent, this is what we pay, take it or leave it.

But again, from the flip side of that is that because they are, they are a few that are setting that and the repo companies aren't. I mean, so does the consolidation of the repo industry help where you guys then have a united front and say, I'M sorry, then we're not picking up your cars. Good luck. Call me when you'll do 500 a car and we're good.

Well, that is, that is fine. That's finally starting to happen. But I'm telling you, it. Through all this, in the last, you know, 10 or 20 years, it's been in the independent repossessors, just like under the whip of these big lenders, telling them, I'm sure there's parallels in your business too, that at some point the tail's wagging the dog. And that's what's transporters, right?

I mean, we, we tell transporters what we want to pay and if not, we'll find someone cheaper. And there's always some guy with a flatbed that's willing to pick up a car for you. And I guess if we're willing to take that risk. But if you go through one of the centralized transport, you know, brokers, they set the rate. You know, if you're buying straight through central, they tell you what it is.

Yeah. And they're telling their drivers, they're telling the transporters themselves. You know, this is what we pay, take it or leave it. This is the new economy, I'm afraid. Yeah, things are not quite changing yet. There was a, a move recently in the state of Illinois, the Illinois Repossession Association. I don't remember the name of it off the top of them, but, but they, they represented such a big, big footprint of the repossession industry in Illinois. They finally told the lenders, you've got to do, you got to pay more. We, we can't do this anymore. We're going out of business. And once that starts happening, and I, and I hope that happens, then, then we might have some more bargaining power. The problem is, because of the federal law, the repossession associations cannot dictate prices.

Yeah, yeah.

Yeah. Restraint of trade, all that kind of stuff. So. And they, the government, the government has sued the repo agency, the associations back in the 80s, TFA included was. And when they were under an edict by the federal government, you can't control prices. Now you can, I think you can speak to policies. You can say, you know, we can't store personal property for free, or we can't store your cars for free. But as far as coming up with numbers, we can't do that.

That's restraining trade. I mean, that's. Yeah, it's like, it'd be like all the car dealers going together saying, we're only going to pay this. Yeah, or for whatever. I mean, we're limited on doing that. This is a super interesting topic, Jeff. You know, we could probably talk about stories from. From the old times for. For hours if we wanted to.

Yeah. Oh, I've got a lot to say too, if you ever want to talk some more.

Well, what's the wildest. What's the. Pat, what's the wildest thing that's ever happened on a repo with you?

I'm a bad storyteller. You're asking the wrong person. I could. Next time we'll get somebody on that's full of stories. I'm just, you know, I was. There's people out there that can really tell a tale of some of the crazy stuff that's happened.

But what if people do want to connect with you more? Pat, your podcast is Repo America and they can find it on all the major platforms. And you put episodes out weekly, couple every couple weeks.

Should be. You guys are in the re the podcast business. You know, we're supposed to be putting them out weekly, but sometimes you kind of get behind.

Well, you got.

Yeah.

When you're operators as well. This is a hobby.

Yeah. Yeah. I love, I've loved doing the podcast though. It's fun because it really makes you take a hard look at some of these things and get to talk to other people as to what their take is on it. So it has been helpful in that regard. So it's Repo America. It's available on Spotify, Apple, itunes, wherever you can get your app, your podcast. And if you get anybody subscribing to it, don't forget to leave a five star review about Repo America.

I like that. So you see, he knows how to do it, Jeff. We aren't good at that. You need to.

If you got a repo in. In what Southeast Florida call Falcon International.

Yeah, well, anywhere. And they can get in touch with me at patrickalconrepo.falcon. like the bird. Falconrepo.com and even it's just to discuss stuff, you know, it doesn't have to be in a repo assignment. And I don't hold myself to be the ultimate expert in this business, but I've just been doing it for too long actually.

Back in the day.

Yeah, back in the day. Yeah.

All right, Pat. Hey, thanks so much for your time. We appreciate it.

You bet. Thanks for having me.

See you.

Dealers helping dealers. Please leave us a review and subscribe the independent dealer podcast.

My biggest issue I run into is like as car prices come down, I. I just keep buying.

Yeah.

And then I see another one and I'm like, oh, wait, that's a good deal. I gotta buy that one too.

Sorry. You'll be fine. Yeah, Cash.

You're fine.

Yeah, that's the problem. I just keep collecting them.