Industry Best Practices Flashcards

Before repossessing a vehicle, what should a servicer confirm to reduce legal risk?

Answer: That the account is truly in default under the contract and any state cure notice rules are met

Repossession must follow contract default terms and state laws, which may require a right-to-cure notice.

Which action by a repossession agent would most likely count as a breach of the peace?

Answer: Taking the vehicle after the borrower clearly objects in person

Most states treat going ahead with a repossession over the debtor's in-person objection as a breach of the peace.

After a repossession, what does UCC Article 9 generally require before the vehicle is sold?

Answer: Reasonable written notice of the planned sale to the debtor

Article 9 requires the secured party to send reasonable notice of disposition before selling the collateral.

What does a 'commercially reasonable' sale of repossessed collateral mean?

Answer: Every part of the sale, including method, timing and place, is fair and follows normal practice

Under UCC 9-610, every aspect of the disposition has to be commercially reasonable.

Personal belongings are found inside a repossessed vehicle. What is the best practice?

Answer: Keep them in a secure place, list them, and tell the borrower how to get them back

Personal property is not collateral and must be kept safe and returned according to state rules.

A borrower disputes how their account is reported to a credit bureau. Under FCRA, how long does a furnisher usually have to investigate a dispute received through the bureau?

Answer: 30 days

FCRA generally gives 30 days to investigate disputes about reported information.

Which practice best supports accurate credit reporting by an auto lender?

Answer: Using the Metro 2 format and auditing data before it is sent

Metro 2 is the industry-standard reporting format, and pre-submission audits catch mistakes.