Illegal vehicle repossessions on the rise, government reports

The heated automobile market has caused an increase in illegal vehicle repossessions. A government oversight group says it’s positioning itself to take action on your behalf.

If you've tried car shopping lately, just test-driving a vehicle is often impossible. The new car stock is so low. And used car prices are up almost 41% over this time last year, so there is an incentive to repossess cars and re-sell them, the feds report.

The Consumer Financial Protection Bureau has issued a bulletin. It says the Bureau has seen a rise in illegal seizure of cars, sloppy record keeping, in turn unreliable balance statements, and ransom for personal property left in those vehicles. The CFPB writes that the current market conditions mean cars are being repossessed too quickly leaving families in dire straights. A sudden, unexpected car loss means lost wages when work is missed, or losing a job altogether, not to mention a wrecked credit report.

Let’s break it down. The government posted that servicers are repossessing vehicles where sufficient payment was made to stop the repossession. Servicers are failing to cancel repossession orders, in turn this leads to unreliable balances. It's a domino effect. This means car owners think they’ve paid enough to hold off repossession when in fact they haven’t. Then to add salt to the wound, the personal property found in the car is behind held ransom until loan fees are paid off. And that's illegal.

Some of these issues are expected to go on for years because cars are so much more expensive than they were a year ago, and loans are much longer than they used to be.

If this happens to you, remember your best defense is keeping good records. Make sure all agreements are in writing. Report any problems to the state’s Consumer Protection Division. Whatever you do, do not get violent or aggressive with the person who comes to get the vehicle. It’s a lose-lose situation.