With the advent of the Dodd-Frank Consumer Protection Act and its enforcement arm, the Consumer Financial Protection Bureau (CFPB) the new “buzz” word in the lending industry and the collateral recovery industry is compliance. Throw in the FDCPA, GLBA, SCRA, FCRA, etc., etc. it becomes abundantly clear that the potential for liability and litigation is daunting.
The new CFPB compliance requirements address data security, identify theft, protection of nonpublic personal information and Industry Standards for screening and hiring. There is no question that these new compliance requirements are important in protecting consumer rights and that violations of these consumer rights can result in costly litigation.
However, I would like to make collateral recovery specialists aware that there has long been a “compliance” issue that is far more costly to the collateral recovery specialist and their longevity in the business. This “compliance” issue has caused more insurance carriers to leave the marketplace than all the other compliance issues combined.
The compliance issue I am referring to is tow truck claims, most especially rear end collisions. It is obvious from these very costly claims that field recovery agents need far more in-depth training in the safe operation of tow trucks in order to meet this most important compliance concern.
One of the largest insurance carriers just left the market, their reasoning being the enormous number and costs of incidents involving tow trucks. Over the past 10 years approximately 15 insurance carriers have stopped writing coverage’s for collateral recovery specialists, the primary reason being tow truck claims. It is apparent that too many collateral recovery agency owners have neglected to provide the proper training of their field agents in defensive driving techniques. Following are some very telling statistics on the operation of motor vehicles:
- Every year, more than 45,000 Americans die as a result of traffic accidents.
- Every 9 minutes, someone in America dies in a motor vehicle collision and another 2 million are disabled or seriously injured.
- Statistically, we have 30 times the potential of dying while traveling in a motor vehicle than a commercial airplane.
- With the average motorist driving approximately 600,000 miles in a lifetime and the collateral recovery specialist driving at least 3 times that amount, it doesn’t take a brain surgeon to realize that we need as much education and training in the operation of tow trucks as possible.
- Almost 60% of all traffic deaths happen at night….when most collateral recovery specialists are working! In night driving, when blinded by bright lights it takes 4 to 7 seconds for our eyes to adjust. That means that, at 55 mph, we will travel between 360 and 560 feet blind.
Statistics show that 60% to 80% of all traffic crashes are caused by Driver Error and that 60% of those claims involve driver error violations such as:
- Following too closely
- Excessive speed
- Improper lane changes
- Disobeying traffic signals
- Improper towing
As a collateral recovery agency owner, other than possibly your office and storage facilities your tow trucks are your biggest expense, and I can assure you that a field agent that has not been aggressively trained in the safe operation of your tow truck is your biggest liability. It is of critical importance that your field agents be fully vetted in two areas….professional certification and defensive driving.
In reviewing numerous Wrongful Repossession law suits across the country I have found an additional, very critical driver error and that is in potentially volatile confrontational situations between the collateral recovery specialist and the debtor where the recovery specialist panics and in his haste to leave runs over or hits the debtor with the tow truck. A properly and professionally trained recovery specialist knows that many times panic causes serious driver error. The know the importance of communication skills in defusing such situations and they know that, as a last resort, they can call a police officer, not to assist in the repossession but to control the situation. Even if the police officer orders the recovery specialist to leave the collateral it is far better than a lawsuit for the death or injury of the debtor.
Another issue that is causing so many two truck claims is driver’s use of technology while operating the tow truck. You simply cannot operate a motor vehicle safely while involved in a lengthy conversation on your cell phone, while texting or while using a computer. There is nothing that is so important that you can’t wait to find a safe spot to pull off the road before using that technology. Think about your personal safety, about the safety of other drivers on the highway and about your family. As the recovery agency owner remember, you could be one tow truck claim from being out of business and you should have regular meetings to promote professional defensive driving to your staff.