As reported by the Wall Street Journal today, a number of automobile dealerships throughout the United States are now extending financing to consumers with no established credit history or poor credit, where consumers are required as a condition to financing, to have a “disabler” installed in their newly purchased vehicle.
According to the article, disablers are “palm sized devices that are placed under dashboards and wired into ignitions.” The devices are manufactured by Sekurus, Inc., and are marketed under the names of On Time and PayTeck. When a consumer gets behind in their payments or misses a payment, “the device doesn’t allow the engine to start, once the car is turned off … the disablers can be removed when the cars are paid off …” Thus, the disablers serve as a form of “electronic repossession.”
Such lending practices have recently gain scrutiny by consumer advocates such as the National Consumer Law Center. According to the Center’s lawyer, John Van Alst, the use of such disablers represents “a kind of intimidation, as well as creating extra hassles for people who are already financially strapped.” Furthermore, it is questionable whether or not the use of such disablers are in violation of state consumer protection laws.
If you or someone you know has been required as a condition to automobile financing to have a “disabler” installed on a purchased vehicle, please contact our law firm for a free consultation.