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Repossessions and Collateral Damage

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  • Repossessions and Collateral Damage

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    Accidents Happen

    Repo agents are often dealing with volatile situations that put an enormous amount of stress on them. There are times when they are snatching a car from a tight space. Many times agents are driving at night and are sharing the road with sleepy drivers, drunk drivers and have their sight hindered by the darkness. If you are going to be in the repossessing business, then you must come to terms with the fact that accidents are going to happen. Collateral is going to get damaged. It may be someone or something else’s fault and it may just be that one of your employees was at fault. When collateral that is in your possession is damaged you need to be calm and asses the situation. If an agent in field is in an accident while driving or towing he needs to contact the proper authorities and document what happened. Then, you need to decide if you are going to turn it over to your insurance company or just pay out of pocket for the damage. When I had my company, we had very few accidents. I had a high deductible to keep my insurance costs down and to the best of my knowledge we never had an insurance claim.

    Some companies decide that they are not going to tell the finance company about an accident. This can be a dreadful mistake and cost the company dearly. Many companies have lost the largest account over trying to cover up damage they had cause to a vehicle they had repossessed. Fresh damage is often noticed by lenders and it can raise questions. You never know when the debtor will redeem his vehicle and find that your agent had rammed his wheel lift into the front bumper of his car. You can argue that the damage was already there and show that it was noted on your condition report. You may even get by with it, but this will put doubt in your client’s mind as to just how honest you are. Lenders know that accidents do happen and they usually can accept it and also appreciate your honesty. If you are honest about an accident, then you are establishing a track record with your client. When someone makes a false claim that you damaged their vehicle, then the client will remember that you have no problem admitting when you are at fault.

    Honesty and Integrity

    One time, one of my drivers was towing a car and it the wheels were slightly cocked and the steering wheel was locked. The agent was trying to get the car away from the house and damaged the front fender and headlight. He was my best agent and had been with me for years and I was not even the least bit upset. I was, however, terrified to call our largest client and tell them that I had damaged their collateral. I had the weekend to think about it and had several people advise me to not mention it unless the debtor got the car back. I just could not bring myself to do it. First thing Monday morning, I was on the phone to the rep at the finance company. I told her that we had secured her collateral, but that there was a problem. She did not even react when I told her we had damaged the vehicle and was quite happy when I told her that I was going to have it fixed right away. She told me that the debtor was not going to redeem the vehicle and that she was very surprised that I had been honest about the accident. According to her, her collections manager had just had a training class for all of the reps in her department. During the class he was discussing how damage to collateral often occurs during the execution of repossession. The collectors were told that repossession companies always lie about damage that they have done and that they will never take responsibility for the repairs. She told me that she was going straight to his office to tell him that my company was different. I saw a big increase in business from that client because I told the truth. Honesty can do nothing but build strong relationships with your clients.

    Please fell free to start a thread in the forum if you have any further information on this topic that you would like to share http://repoindustry.com/forum/index.php
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