The “buy here pay here” industry has experienced an enormous growth spurt in the last 15 years. Unfortunately for the consumer, (MostlyAmericans with an average income of $37,000 – $50,000) interest rates have grown at the same pace. These dealerships are everywhere. It’s hard to find any town without at least 3 or 4. It’s a. Don’t let the in-house financing convenience of these dealerships fool you because you’d be better off buying with a credit card. The rates are sometimes more than 30%. It’s standard practice for a car to be sold, repossessed and sold 5 or 6 times.
The Consumer Financial Protection Bureau – a new organization begotten from the Dodd-Frank reform laws of 2010 – issued DriveTime Automotive an $8 million dollar fine for improper debt collection. This sent a message to the industry known for making a majority off insane interest rates as DriveTime, based out of Phoenix, AR, is the largest “buy here, pay here” company in the nation.
The law was broken when DriveTime collectors began calling their clients place of work demanding payment. This is strictly forbidden as it can lead to loss of employment and the damage can be irreprehensible. One customer was allegedly called more than 30 times at their place of employment after requesting DriveTime not call work numbers.
The BHPH market wasn’t subjected to any form of specific oversight until 2010. Director of the National Consumer Law Center’s “Workings Cars for Workers Families” John Van Alst, is diligently working to make sure the industry is much more closely regulated, advocating for transparency and policy reform.
The DriveTime settlement also stated the company knowingly reported inaccurate damaging customer information to Credit Bureaus. Unfortunately, this is something not foreign to the industry despite its detrimental impact to an individual’s financial well-being. The complaint in DriveTime’s case was improper timing of reporting information. It was alleged DriveTime would report events well before they took place.
DriveTime issued the usual politically correct statements in response to the fine saying they would change their debt collection practices. While it remains to be seen how much reform will be seen in the BHPH industry, this was a big win for the consumer. For information on what buy here pay here dallas dealers are reputable contact us and we will guide you in the right direction.