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Repos Gone Bad: Are Big Lenders To Blame For Driveway Violence?

Posted: 03/22/2012 9:52 am Updated: 03/22/2012 12:07 pm

As auto repossessions go, the case of the 2004 Dodge Ram looked to be an easy one. The assignment was what industry insiders call a "voluntary repo," meaning the owner had agreed to give up his pickup truck without a fight. No sleuthing, no hide-and-seek. All the repo man had to do was show up at the appointed time, hook the Ram up to a tow truck and haul it away for the lender.

Nobody should have been hurt, let alone killed.

Three years ago, a repo company dispatched Michael Faron Brown, a 27-year-old South Carolina newlywed, on a rare trip across state lines into Georgia to return a few cars to debtors who were back in their lenders' good graces. Brown worked on contract for a subsidiary of a national repossession company called Renovo Services LLC, and his boss asked him to also handle a few repossessions for a colleague who had bailed on his assignments. That's how Brown picked up the account for Lidie "Joe" Clements.

Clements, a paint contractor near Augusta, Ga., was having a hard time finding jobs due to the sour economy, so he'd fallen behind on the payments for his Ram. He tried to work out a payment plan with his lender, Nuvell National Auto Finance, then a subsidiary of the massive home and auto lender GMAC. According to trial court records, once it became clear that Clements couldn't make good on his bills, he told Nuvell that he would voluntarily surrender his truck, which, as is custom, would likely be sold or auctioned off to cut Nuvell's losses.

Brown apparently showed up at Clements' home a day early for the scheduled repo -- with his pregnant wife, Victoria, in the passenger seat of the tow truck. According to court records, once they were outside Clements' house, the newlyweds called him on their cellphone. The conversation quickly turned combative. Clements said he wasn't home and demanded they not take his truck until the following day, once he'd had a chance to clear out his belongings. But Brown didn't leave.

Under the aggressive incentives that many financial institutions and their repo contractors now force on agents, industry veterans say a repo man like Brown would have been eager to get the truck right then and there. In a system that’s fast becoming industry standard, Brown was working on a flat-rate contingency basis: If he didn't repossess the vehicle, then nobody owed him a dime for his efforts. If he waited until the following day, he'd be sinking more time and gas money into the assignment.

In the topsy-turvy repo world, it was also in Brown's financial interests to have a reluctant target. According to his payment plan, Brown was earning $70 for each involuntary repo he completed and a mere $30 for each voluntary one. If Clements was no longer surrendering his truck by choice, then Brown stood to earn more money.

According to the version he later told in court, Brown called his office seeking advice. The woman handling the Clements account told him to proceed, he testified. "If you see the unit, get it," she allegedly told Brown.

It didn't matter that a friend of the Clements' had parked her van in the driveway behind the pickup, blocking it in almost entirely. As Brown would later say in court, "I was always up for a challenge." So he backed his truck into the Clements' driveway, maneuvering his tow in the narrow space between the van and the house.

Chaos ensued.

Joe Clements and his friend Bill Jacobs returned to the house just as Brown was trying to drive off with the pickup. According to Clements' version, Brown clipped the van repeatedly as he tried to thread the pickup between the van and the house. The van belonged to Jacobs and his wife, Pamela, who had been inside the house with Clements' wife, Cindy. Joe Clements would later tell police that he pleaded with Brown to stop damaging the van -- he was giving the truck up voluntarily, he said, and he just wanted to remove his tools first.

"Stop! You're hitting the van! Stop! We'll give it to you!" he allegedly said, according to court records.

Brown dropped the pickup from the tow. Bill Jacobs confronted him on the driver's side of the tow truck, while Cindy Clements confronted Victoria Brown on the passenger side, according to court documents. Brown later claimed Jacobs was acting overtly hostile. Whatever the case, Jacobs was knocked to the ground during the commotion, falling in front of the tow truck.

Brown drove over Jacobs, through the yard and down the street. Brown would later say he never meant to run over Jacobs, that it was all an accident.

"Them tires don't have a conscience," he said in court.

When Pamela Jacobs came outside, her husband was lying in the street; she lay down with him. His pelvis and abdomen had been crushed by the truck tires, according to a doctor who later examined him. His ribcage had been fractured, his broken ribs puncturing his lungs. His chest and bowels were filling with blood. The 64-year-old would be pronounced dead an hour later.

As Jacobs lay dying, Michael and Victoria Brown fled the area. It isn’t clear whether the repo man knew he'd just killed someone -- although it wasn't long before the gravity of the situation set in, and the Browns realized they were fugitives. The following day, they wrote on the wall of their joint MySpace account, "ready to stop repoing. When you have to worry about criminal charges ... I say that is enough!"

"Stressing the f**k out," they wrote a short time later. "Why did we have to go to GA to repo yesterday?"

Wanted for murder, the Browns turned themselves in to the police five days later.


Clements lost his truck during a boom time for auto repossessions. Just like the housing market, the auto finance industry -- which ranges from big banks (like Bank of America and Santander) to major auto loan specialists (like Ford Motor Credit, Toyota Motor Credit, and Ally Financial, formerly GMAC) to thousands of smaller credit unions -- had experienced its own subprime-fueled credit binge during the last decade.

When the economy finally cratered, a record number of car owners were unable to pay their bills. Many borrowers had taken on more debt than they could handle or, like Clements, suddenly had a hard time finding steady work. In many cases, their auto loans had been securitized and sold off to investors, à la the mortgage debacle. More recently, the number of auto repossessions has fallen dramatically, due to tightening credit standards.

Of the estimated 1.3 million repossessions performed last year, the overwhelming majority ended peacefully. But plenty of repos have gone bad since the economy went south. According to the industry website CUCollector, which recently started tracking repo-related violence, press accounts indicated there were at least 16 shootings and five deaths stemming from repossessions in 2011. Often it was the repo man who was hurt. In 2009, the same year Jacobs died, two Alabama repo agents were shot and killed.

In some ugly cases, you might blame the ill will of debtors. In others, the carelessness of bad-apple agents. In many cases, however, industry insiders trace the problems back to decisions by lenders at the top. According to insurers, lawyers and longtime repo agents, the big-time financial institutions as a group are paying less than ever to have vehicles recovered in the event of default.

In the minds of many repo agents, the penny-pinching by lenders has pitted them against one another, as reputable firms struggle to do the job on thinner margins and less-reputable agents willingly take on the cheaper work.

"This is where the recession and the finance world come right into the front yard," says Kevin Armstrong, a former repo man who is now a collections manager and runs CUCollector on the side.

Mary Jane Hogan, president of the national trade group American Recovery Association, believes that lenders' push to cut costs at the expense of repo agents is ultimately lowering standards in her industry.

"I've been in this since the day the cars were hotwired, and the difference is just unbelievable -- the way things have changed, the way repossession agents are treated by clients," says Hogan. "The clients at this point in time, all they want to know is the price, who's the cheapest. They call for a quote, and they don’t care what the job involves. They want a flat rate."