CORPS Announcement –CARS Revises Contract

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For Immediate Release

Over the last few months the Council of Repossession Professionals (CORP), has been asked to address concerns regarding service level agreements (SLAs), aka contracts. The CORP is made up of representatives from all of the State and National Associations/ Groups throughout the United States. Due to widespread industry concern involving service level agreements (SLAs) member agents have asked their respective associations for help when it comes to (SLAs). The CORP’s mission is to address issues of industry concern for agents, clients and suppliers. Our goal is to reach an amicable resolution that is fair and balanced for all parties.

TODAY the CORP is pleased to announce Steve Norwood and the management team of CONSOLIDATED ASSET RECOVERY SERVICE (CARS) have chosen to be a true partner with the recovery industry. CARS has been willing to adjust their contract today and in the past while working with the CORP. The adjustments have been made in several areas to help protect the repossession agency and create a more equitable relationship. CARS understands that they share in operational responsibility and liability. In doing so they have guaranteed that they will strive to have the most compliant agents. CARS can have agents in their network who bring a large level of CONSUMER PROTECTION to the table.

Over the last five or so years SLAs have become increasingly complicated and one sided. Most agencies in the recovery industry cannot afford to call an attorney every time they are presented with a client’s contract. The agency owners simply (and erroneously or naively) trust their clients. They believe that there is a mutually beneficial partnership and maybe even a friendship that has been formed while working together. Unfortunately, some have found themselves in litigious situations facing large defense bills, even when they were not at fault nor did they create the situation. The contract the agency signed made them responsible for the defense of the client. Some contracts state that the client will have the right to choose the attorney defending them at the agents’ expense.

When agency owners are asked to sign contracts making them liable no matter who is at fault, it is and should be a growing concern. Assuming/hoping or believing that a client will never act on these clauses, or that the repossession agency will never actually be held to what they are signing simply isn’t true anymore.

The recent ruling from the U.S. Court of Appeals for the Third District in the case of Goldstein v. Repossessors Inc. may put repossessors in harms way even more with their ruling that the Repossessor and the forwarder are being classified as debt collectors under the RICO laws. Right, wrong or indifferent the cost of litigation is something the average agency cannot afford. In most cases, they will go out of business or bankrupt because they cannot meet the financial commitments they have legally obligated themselves to in signing lopsided, far-reaching agreements. Insurance providers are not bound by the agreements signed by repossession agents. Insurance carriers may not provide coverage if they are not allowed to participate in the claim or to utilize their existing legal relationships. Repossession agencies who assume responsibility for the actions of their clients with no regard for what is provided for in their insurance contracts are potentially obligating themselves to significant out of pocket costs.

The CORP is providing a unified voice for the industry. Instead of clients having to deal with several points of contact, the CORP simplifies and streamlines the communication process. While trying to simplify and streamline communication between repossession agency and client, the CORP can speak on the behalf of the industry, but we cannot ACT on the behalf of the industry. It still remains the individual repossession agencies responsibility to stand up against unfair contracts. We look forward to being a part of the solution for agents, clients and suppliers in matters of industry concern.

 

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