Phoenix, AZ – May 18, 2012 – Due to the overwhelming concurrence of disapproval from the major repossession associations, JP Morgan Chase Bank has issued a new contract revising its previous terms to its contract repossession vendors.
As previously reported in April, in an unprecedented show of unity, the AFA, ARA, NFA, TFA and RSIG had all penned letters to their members advising them of the their concerns about the original agreement.
Whereas the original contract included clauses holding the repossession agency solely responsible for any and all damages, most onerous was the “best price” guarantee which had required that the contract agency charge JP Morgan Chase Bank the lowest price being charged any client.
Furthermore, the agreement required “In addition to JPMC’s other audit rights under this Agreement, JPMC will have the right to audit Supplier’s records with respect to compliance with this Most Favored Customer provision.”
Based upon a contract copy reviewed by CUCollector, apparently the result of these contractual demands had caused a great deal more ruckus and refusal than JP Morgan Chase had anticipated and they had contacted several of the associations to advise them that they were taking the contracts back under submission with their attorneys for revision.
Showing fair sensitivity to their contract vendors, JP Morgan has since released a revised contract removing the most controversial sections as shown below in their forward to the new contract which they have demanded be returned to them no later than May 23, 2012.
- Master Services Agreement: Section 4.3 (c) Most Favored Customer
This section has been removed, as it was not applicable to repossession vendors.
- Master Services Agreement: Section 10.1 (d) Indemnification
An indemnification clause for suppliers has been added.
- Schedule One – Repossession Services: Section 3 (h) 2
The following statement has been removed: “This includes satisfying the balance of the Account, or fair market value of the Vehicle, whichever is greater, if the Vehicle is stolen or deemed a total loss while in the custody of Supplier.” The intent of this statement was to cover JPMC in the event there is negligence on behalf of the supplier, which is already covered in Section 10 of the Master Services Agreement.
While by no means a strike, the industry associations showing of unity clearly demonstrated the capabilities of the industry to thwart its members from being pressured into an unfeasible and unfair contract. Both the associations and JP Morgan Chase Bank are to be applauded for their efforts and compromise which will hopefully allow both agent and JPMC to coexist with long term mutual profitability and respect.