June 3, 2014 – The repossession forwarding companies are lawyering up in an effort to save their stake in the repossession industry in Florida as a declaratory statement confirming the states long standing but unenforced prohibition on indirect repossession assignments is expected by this week.
For many years, Florida repossession companies as well as the associations, have argued that repossession forwarding, otherwise known as facilitating, is by law illegal in the state of Florida. The state of Florida’s longstanding repossession laws contains a provision that prohibits the assignment of a repossession by anyone but the lender.
On May 9, 2014, the Florida State Department of Agriculture and Consumer Services released an email highlighting the definitions of chapter 493, which regulates repossession activity in Florida that shifted focus to the definition of what a “Recovery agency” is.
(20) “Recovery agency” means any person who, for consideration, advertises as providing or is engaged in the business of performing repossessions.
i. Sets forth an unadopted rule under Section 120.52(20) of the Florida Administrative Procedure Act (the “APA”); and
ii. As such, constitutes an invalid exercise of delegated legislative authority under Section 120.52(8)(a) of the APA.
The above definition is rather clear, but as evidenced by alleged correspondence received through a third party via public record, is clearly a cause of concern to Scott Jackson of MVTRAC, who, on his own and through his attorney has attempted to no avail to motivate the State Department of Agriculture and Consumer Services to retract their earlier broadcast of this definition which could threaten the legality of unlicensed entities other than lenders to assign repossessions in the state.
Based upon this correspondence there is great concern for the future of repossession forwarding companies in the state which could threaten their ability to conduct business there.
Jackson’s initial May 12th letter to Ken Wilkinson, the Acting Director Division of Licensing Florida Department of Agriculture and Consumer Services, Jackson reportedly requested clarification and took a conciliatory tone, but claimed that his company as well as others would be “irreparably harmed” if lenders believed that using a repossession forwarder in Florida were illegal and that he would be forced to proceed with legal action should the state not rule in their favor.
“, please do not accept this as an intended threat but rather an informative statement that if we are at a point in which a declaratory judgment has been made in favor of denying my company as a Forwarder to assign accounts to licensed agents within the State of Florida, we would be forced to file a claim of action and injunctive relief as a response to what we believe is an allowed business model.”
On May 22nd, Jackson’s attorney, Sara Siegall, reportedly requested that the state send a follow up email to all of the previous recipients retracting the substance of the May 9th email which made the disputed point.
On May 29th, Wilkinson, Acting Director Division of Licensing Florida Department of Agriculture and Consumer Services, responded to Jackson and his attorneys request with an email offering them the option of seeking a declaratory statement as a means to resolve the dispute between the repossession associations and the forwarders but prefaced with the following;
“We do not retract the statements made by Mr. Warren in his e-mail of May 9, 2014. His comments concerning our handling of cases involving forwarding companies was not a formal legal opinion but based rather on a straightforward interpretation of section 493.6101(20), Florida Statutes, which he cites in his e-mail, and are consistent with our past business practices.”
Sources close to the matter believe it is expected that the state Department of Agriculture and Consumer Services will issue a declaratory statement confirming the earlier definitions by the end of this week. An act that could immediately impose criminal actions upon any forwarder sending assignments to agents in Florida starting with a misdemeanor and escalating to a felony for multiple convictions of its breach.
Reliable sources have informed me that several large repossession forwarding companies have already pooled their money to develop a legal team to fight this expected ruling and that considerable amounts of money will also be employed to lobby in their favor.
With millions of dollars in repossession revenue at stake, the “Goliath” that is the forwarding industry, will clearly fight this with all of their might. While the “David”, which has argued this point consistently for years and sought its enforcement, do not appear to be taking as active a role in this game changing situation at this time. Sources assure that this will be a hard fought legal battle with media scrutiny weighing in on the public safety element of contingency being the focal point of contention.