TX Court of Appeals Rules Against Dealer, Says Repossession Was Improper
A Texas appeals court ruled that a buy-here-pay-here dealer wrongfully repossessed a vehicle, and that its actions following the repossession violated the Texas Deceptive Trade Practices Act.
The dealer in question sold a vehicle to a customer. The customer purchased insurance on the day she purchased the vehicle and maintained that coverage throughout. The customer made all payments. The dealer repossessed the vehicle, stating that the customer failed to provide proof of insurance coverage. The customer provided proof. The dealer then said that the customer had to pay $500 before the dealer would return the vehicle. The customer refused to pay the $500, and the dealer sold the vehicle to someone else.
The Court of Appeals found, among other things:
- The customer had insurance the entire time she owned the vehicle
- The customer made all payments as required by the retail installment contract
- The retail installment contract failed to disclose a mandatory repossession fee that would be charged even if the repossession was in error
- The vehicle had an illegal GPS device installed
- The dealer failed to disclose the existence of a GPS device
- The customer did not consent to the GPS device
- The dealer erred in charging a repossession fee when the repossession was completed by the dealers' own employee using the employee's tow truck
- The dealer failed to maintain accurate customer records that might support any claims it might have against the customer
Lesson to be learned: If you repossess a vehicle, make absolutely sure that the customer is in default of some part of the contract. If you mistakenly repossess a vehicle, then return it immediately and do not attempt to charge the customer a fee. Finally, read TIADA's weekly emails and Texas Dealer magazine!