25 Feb 2016 – It has become more and more frequent that we as an industry have been asked to sign service contracts which are one-sided in many respects, providing maximum protections to the financial institutions while exposing our industry to greater liability, even in cases where the financial institutions are solely responsible for the actions that give rise to this exposure.
On behalf of the industry, we have sought to obtain revised contracts designed to ensure that protections afforded only to the financial institutions be afforded to all parties to the agreement. The clearly stated goal is not to take away any of the protections that the agreements afford to the financial institutions, but instead to add protections for the benefit of our entire industry.
Unfortunately, our efforts have been largely ignored, with more than one major institution declining to negotiate a fair contract with us directly through our attorneys.
It is our recommendation that, in addressing service agreements from financial institutions, you retain counsel to closely review the terms of the agreement or at a minimum, challenge the provisions of these agreements to ensure that you have the maximum protections available under the law. This includes, at the very least, a reciprocal indemnity provision and the inclusion of language that does not require you to fund the defense of the financial institution when they are sued as a result of their sole negligence. Entering into these agreements as is exposes us to more lawsuits and financial strain. Moreover, some of these agreements contain terms which are contrary to certain terms contained within your liability insurance policies so that claims you believe to be covered, will not be.
It is in our best interests as a group to challenge these agreements. In doing so, we will force the financial institutions to listen to our concerns and work with us in the preparation of fair agreements.
The Council of Repossession Professionals
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