Another Controversial Repo Contract – this one by Primeritus Financial Services

contrct_1Primeritus Financial Services, Inc. who made headlines by it’s acquisitions of Renovo, USA Recovery, and Skip Master in 2012, sent new service agreements to their network of recovery agents on Tuesday March 12,2013 that includes language giving Primeritus, or 3rd parties of their choice, complete access to recovery agents yards, offices, records, and Primeritus’s clients recovered vehicles. Agents must agree that they will never hold or detain any vehicle for any reason and must waive any right or remedies at law, including any lien or additional costs, that would obstruct Primeritus, or 3rd party of their choice, from taking the vehicle.

Also included in the new agreement are provisions that recovery agents may not charge for storage of vehicles or personal property unless by special instructions by Primeritus or their client.  Another section states that unless precluded by law, all personal property must be made available to Primeritus.

While Primeritus did lower it’s recovery fees by only a few dollars, Primeritus increased it demands on the agents by increasing free vehicle storage to 20 days, including standard cut keys at no charge, and transporting the vehicle, if not redeemed by the debtor, to the auction for free for the first 30 miles.

Additionally, Primeritus included assessable fees on the agents.  A $75 dollar fee could be assessed if Primeritus wanted to audit the agent’s yard, a $250 fee could be assessed if the agent failed to remove all contents, including garbage, from the vehicle before it arrived at the auction.  Fees may be charged to the agent’s receivables, allowing no form of redress for the agent.

Primeritus also rolled out it’s “Fast Cash” discount program offering faster payment times on recovered assignments. The “Fast Cash” discount program offers payment in 7 business days for a 10% recovery rate fee (agents would be paid 90% of the recovery rate), 14 business days at a 5% fee, and 21 days at a 2% fee.

What may just be bad timing for Primeritus, the “Fast Cash” discount program came out just one day after the announcement by Secured Collateral Management to offer same day payments to their agents without any fees or deductions.

As agents across the Country read the new agreement, reaction has be mixed with many comments using words like “Chase-like” ,referring to last years JP Morgan Chase agreement that would have made agents responsible for damage to a vehicle at full vehicle value, and “Renovo’d” in reference to the failed micro-managed tactics placed on agents by Renovo.

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