The subprime auto-lending business — writing car-loans to people who can't afford them — is fuelled by GPS-enabled immobilizers that let lenders track and shut down cars whose drivers violate terms of service, from missing payments to fleeing the tri-county area in order to move into a shelter for abused women.
Different immobilizer vendors have different policies, but the worst of them let lenders track drivers' every move and immobilize their cars under potentially dangerous circumstances. One victim claims her car was shut down while she was driving on the highway; others say their cars were terminated while they were in remote locations with no way to water, food and other necessities, or in dangerous neighborhoods.
Some immobilizers also have audio feedback: when your payment is due or overdue, your car begins to constantly shout at you, insisting that you send money to the lender right away.
The immobilizers are now locked in an arms war with the poor people whom they control; to counter the Internet-based tutorials for removing or disabling your immobilizer, the vendors are adding decoy immobilizers to trick customers into thinking that they have disabled the device.
The whole thing is driven by a Wall Street bond market that packages up subprime car-loans into exotic derivatives and sells them on to investors. This is effectively the same bubble that tanked the world economy in 2008, except that one was driven by subprime home loans. The increasingly financialized economy, where income from rents eclipse income from the "real" economy of making and selling things people actually need, now mines the most marginal of businesses for transactions to turn into bonds that can be securitized, traded, and reflected on a company's balance sheet.
At its extreme, consumer lawyers say, such surveillance can compromise borrowers’ safety. In Austin, Tex., a large subprime lender used a device to track down and repossess the car of a woman who had fled to a shelter to escape her abusive husband, said her lawyer, Amy Clark Kleinpeter.
The move to the shelter violated a clause in her auto loan contract that restricted her from driving outside a four-county radius, and that prompted the lender to send a tow truck to take back the vehicle. If the lender could so easily locate the client, Ms. Kleinpeter said, what was stopping her husband?
“She was terrified her husband would be able to find out where she was from the tow truck company,” said Ms. Kleinpeter, a consumer lawyer in Austin, who said a growing number of her clients had the devices installed in their cars.
Miss a Payment? Good Luck Moving That Car [Michael Corkery and Jessica Silver-Greenberg/NYT]
(Thanks, Henry!)
(Image: Motorway Traffic, Alan, CC-BY; Hal 9000, Wikipedia)
