Business for the nation’s top recovery agents (better known as “repo men”) is booming. It has gotten to the point that some of them are feeling downright uncomfortable about their own success.
Business for the nation’s top recovery agents (better known as “repo men”) is booming. It has gotten to the point that some of them are feeling downright uncomfortable about their own success.
“Joe the Plumber used to be our friend and neighbor,” says J. Patrick Altes, 54, the softspoken, red-haired president of Falcon Inter national in Daytona Beach. “Now we’re repoing his truck.”
Altes is dealing with a surge of delinquencies and defaults—coming at the end of a long boom in Florida’s real estate and construction markets. With 50 employees and a fleet of 10 “self-loading” tow trucks, which can hook and remove a car or truck from a homeowner’s driveway in a matter of seconds, Altes is bringing in 400 cars and trucks per month this year, up from 175 month in early 2008.
While business is better than ever, Altes does not like having to target “fellow church members and Rotarians.” It’s the price he pays for moving “from crack town to the gated communities.” He’s spending less time with “the usual con men, travelers, and deadbeats,” and more time with “good people who, through no fault of their own, are unable to pay their bills.” Though sympathetic to their plight, he has put the clamps on scores of struggling or outof- work real estate agents, appraisers, mortgage bankers, merchants, carpenters, roofers, carpet layers, and—yes—plumbers.
According to national statistics compiled by MVTRAC, a Chicago-based firm, repo agents will pick up an estimated 2 million vehicles in 2009, up from 1.8 million in 2008, 1.6 million in 2007, and 1.1 million in 2002. The repossession of boats has nearly doubled over the past two years.
In the steepness of the current economic downturn, the upturn in the repo business may be likened to a movie on runaway consumption played in reverse. Think of all the fancy cars, boats, jet skis, and Harleys that were flying off dealers’ lots and landing in front of peoples’ homes during the economic boom. Now think of the same objects flying back the other way, landing in lots similar to, if not identical with, the places where they were first sold, where they will now be auctioned off to a new set of owners at distressed prices. This is the forcible deleveraging of America.
Even if you are biased in favor of the consumer, it would be wrong to dismiss the man responsible for retrieving those backward-flying assets as some kind of blackguard profiting from the misfortunes of others. Believe it or not, the repo man is your friend. Like the butcher, the baker, and the candlestick maker, he exemplifies the power of the “invisible hand.” Without a doubt, your own affairs as a consumer or small business owner would be more difficult without him.
If you have ever bought anything on installment—from a car or a truck to the equipment needed to run a farm or a small- or medium-sized business—you can thank the enterprising and resourceful repo man for helping to make you a creditworthy risk in the eyes of the lender. You can also thank him for the fact that you pay a much lower interest rate on your installment loan than you do on your credit card, which is not secured by any collateral. You might even thank him for your job—if you still have one.
This is how Jack S. Barnes, a nationally recognized expert on the repossession and liquidation of collateral, explains it in his book Collateral Recovery, published in 2008:
The ability to repossess collateral to reduce losses from a defaulted loan, and the right to dispose of that collateral, are two of the most important laws affecting the financial health of the United States! In 1990, 41% ($288 billion) of all installment loans outstanding were for the purchase of cars. The latest report indicates enormous growth. The current report by the Federal Reserve estimates the amount of installment loans in this country to be $1.3 trillion and that 60% or $780 billion is in outstanding auto loans. The ability to repossess an automobile if the loan defaults provides the security for these loans.
Without the ability to repossess, funds would dry up…with devastating results to both the auto industry and the nation’s economy. It is easy to see the immediate impact on the auto manufacturer, the corner gas station, the auto parts store, radiator shop, the tire shop, auto mechanics and dealers, fabric manufacturers, electronic manufacturers, glass manufacturers, and hundreds more. Add to that the grocer, department store, and every other merchant where those now unemployed shopped, well, the circle keeps growing.
I Decide to Pay the Repo Man a Surprise Visit
Earlier this year, a repo man knocked on the door of a friend of mine—the owner of a small business—and asked for the keys to the car. My friend had missed a couple of car payments because some of his clients had been slow in paying him, and also because he had over-stretched—leaving no margin for the possibility of late payments. Looking out the door, he saw his prized Mercedes dangling from the back of a tow truck. Like it or not, this was the old story of losing a favorite toy due to careless or negligent behavior. After arguing for a few minutes, he handed over the keys.
That incident piqued my interest in the repo trade, but it had nothing to do with how I came to know Pat Altes, Jack Barnes, and other members of the profession, including the legendary Ron L. Brown, an ex-CIA agent who has repoed “everything from a million-dollar oil rig…and 40 head of cattle…to seven prostitutes” sought as witnesses in a celebrated Hous ton murder case. (Acting, in effect, as a repo agent for the Texas Rangers, Brown was able to track the badly frightened girls down to a hiding place in Corpus Christi and secure their safety, before the murderer and his friends discovered their whereabouts—and secured their silence.)
My introduction to the repo trade came about as an unexpected result of a trip I made to Daytona Beach in mid-April. When my wife and I stopped for lunch at the famous Shores Resort & Spa, the lobby was filled with a boisterous convention crowd. Over lunch I wondered aloud about the identity of the group.
“I’m pretty sure they’re financial editors from Time or the New York Times,” my wife said. She had seen a sign in the lobby that said “Time Finance,” or “Times Finance,” plus one other word that seemed a little strange, which made her think they were editors.
Like the acerbic Holmes wheeling on credulous Watson, I hooted in derision. Clearly she had leapt to the wrong conclusion. First of all, it was nonsense to think that one of those publications could afford to fill half of a large and expensive seaside resort with a bunch of financial editors. Hell, they didn’t even have that many financial editors. “Have you looked at Time lately?” I said. “It’s so thin you can shine a light through it. And the New York Times is a dinosaur lumbering toward extinction.”
Secondly, the men that we had seen in the lobby (and they were mostly men) were about as far removed from the pussy footing, green-eyeshade types as it was possible to imagine. They didn’t look like professional football players, but they were big men who walked about with an unmistakable swagger. Some were decked out in alligator boots and cowboy hats, others in glitzy Italian suits and wraparound sunglasses (worn indoors). There was one man in his early 20s with spiky hair and a pair of horseshoe-shaped steel earrings. No one could imagine these people tsk-tsking and making little squiggle marks over other peoples’ copy.
On closer inspection, the sign in the lobby said “Time Finance Adjusters.” Adjusters, not editors. But this odd circumlocution only deepened the mystery. When my wife asked one of the conventioneers what it meant to be a “time finance adjuster,” he just laughed and said, “Pay no attention to that, ma’am. We’re repo men. You know, we steal cars legally.”
Aha: one of the ways a bank can “adjust” a car loan if you don’t make your payments on time is to send the repo man out to steal it back from you. (On its website, Time Finance Adjusters, or TFA, describes itself as “the official association for the nation’s repo agents,” with hundreds of members in cities and towns throughout the United States.)
How to do that with the latest technology became clearer to me as we left the hotel after lunch. Out in the parking lot, equipment vendors were showing off their wares, such as the “220 Snatcher,” a complex steel assembly with moveable arms and jaws that clamp and hoist. Designed to fit into the bed or undercarriage of an ordinary-looking pickup truck, the Snatcher combines the virtues of stealth and speed. It allows the repo agent to cruise around a neighborhood without arousing suspicion and then dart in and out of a driveway with a car in tow in less than a minute.
The agent doesn’t even have to get out of the truck. As the brochure said, “All the functions of folding, unfolding, extending, retracting, raising, lowering and operating the steel claws can be done inside your truck cab using the remote.” In other words, to a trained operator with a joystick, it’s as easy as changing the channels on a television set!
What little I had learned about the repo trade to this point had whetted my reportorial appetite. As I thought about it, it seemed possible that these people might have a better perspective on the economic craziness of our time than—say—a whole boatload of financial editors. Viva Repo Man and Repo Woman, I said to myself. Knowing that their gala dinner would commence at 6:30 p.m., I decided to return to the Shores and gate-crash the party.
What to Do If the Repo Man Comes to your House
Repo agents go to considerable expense to secure the lots where they store repossessed cars and trucks. They put up tall fences topped with barbed wire and invest in video surveillance and guard dogs.
Happily for me, none of those protective devices were in place when I joined the party on the hotel’s veranda as the lone uninvited guest. It is fair to say that my presence created a bit of a stir—adding to that of the stiff breeze blowing in from the Atlantic on a slightly chilly evening. I came out of curiosity and was myself an object of curiosity in this crowd of about 150 people. Without my having to say—“Take me to your leader”—people went out of their way to steer me to certain individuals that I “had” to talk to if I were going to write about their business. As I was not, at this point, on assignment for any publication, I found myself in the interesting position of being a free-booting reporter surrounded by pirates—well, not pirates, exactly, but people who “steal” legally, and for profit—with all kinds of stories to tell about the tricky business of separating people from some of their more prized possessions.
Paul Bukur, a smooth-talking and sharply dressed repo agent from Tehachapi, California, was one of those I came to know. Like many others in the group, Bukur, now 49, grew up in the business—it being the family business. He repoed his first car at the age of 13 and received his first death threat a couple of years later—after repoing a limousine from a member of the mob. He told me: “My brother and I had FBI protection going back and forth to school that year…in the limo.” Coming after a slight pause, the last phrase was delivered with a wicked smile and perfect comic timing. Today Bukur specializes in the recovery of Mercedes-Benz cars and trucks in his area of southern California (under contract with the automaker’s credit company) and all kinds of boats (under contract with National Liqui dators, the dominant force nationally in the recovery and auction of boats). His business—like Patrick Altes’s on the other side of the country—has more than doubled in the last year or so.
Though he favors the stealthy approach of driving what appears to be an ordinary pickup when pinching $80,000 cars from delinquent debtors (“You don’t believe it’s a tow truck until I’m actually gone”), Bukur is nothing if not open in talking about what you and I can do to keep him out of the driveway. In his words:
You don’t have to worry about me jumping over your fence or breaking into your garage. I won’t go into your driveway if you have put up “No Trespassing” or “Do Not Enter” signs. And if you catch me in your driveway and order me to get the hell out, I will get the hell out.
That night and over the next day and a half (I skipped the beach and hung out with the repo men through the rest of their conference and my brief vacation) I talked to a number of other repo agents who sounded a more bellicose note. One told me that he felt “a real adrenaline rush” with every confrontation in the driveway, and another—who plied his trade in the desolate stretches of western Penn sylvania, where “you drive a hundred miles between trees”—said that there was nothing about his job that he loved so much as “talking someone out of his car”—enjoying the experience like a cat playing with a mouse. As other repo men around the table (this was at lunch the next day) rolled their eyes and laughed in deeply knowing agreement, he went over his ripostes to a whole list of pleadings:
Debtor: Please, just give me a little time.
Repo guy: Time’s not mine to give.
Debtor: How am I going to pay for my car if you take it away from me?
Repo guy: You couldn’t pay for it before.
Debtor: I need to call my banker.
Repo guy: Here’s my cell phone. Go ahead and give him a call.
Many repo men take pride in their salesmanship. They think they can do as good a job talking you out of your car as the man who sold it to you did talking you into it. It’s all a matter of overcoming some initial resistance in a friendly (or at least a non-hostile) and persuasive manner. Bukur laughed in pointing out one of the factors that has allowed his parents, both 77 years old, to continue to excel in doing car repos—“Who can say ‘no’ to great-grandma or greatgranddad?”
There was complete agreement among all the people I met that it is up to the repo man—whether relying on stealth or his powers of persuasion—to make sure that there was no “breach of the peace.” This is where the law comes into play.
Under most loan agreements, if the debtor has reason to know that he has failed to make timely payments on his debt (who wouldn’t?), that in itself constitutes notification of a foreclosure and entitles the lender, or his agent, to come onto the debtor’s property to seize the delinquent asset.
But the law, in other ways, overwhelmingly favors the debtor, as Jack Barnes, the author of Collateral Recovery, and other experts agree. Most especially, when push comes to shove and a violent collision erupts between a debtor and a repo agent, judges and jurors are far more likely to side with a debtor sitting on his own property than they are with a repo agent intruding upon his private space (in the eyes of the law, a man’s home really is his castle).
All responsible repo men aim for a peaceful recovery.
But for delinquent debtors thinking they can hold on to Aston Martins and Lamborghinis simply by hanging out a “No Trespassing” sign, a few more notes are in order.
One: Once you leave your own property with it, your car is totally in play. Nothing prevents the repo man from grabbing it when you stop at the 7-Eleven and go in to pick up a pack of cigarettes.
Two: If waiting for you to move your car seems like too much work, the repo man (or the lender) will tell you that the next unwelcome visitor to your home will be the sheriff, who won’t be put off by any signs or obstacles you put in his way.
Three: It is against the law to conceal, move for purpose of concealment, or to attempt to sell, transfer, or dispose of property that has a lien against it.
And four: be warned that nothing that TFA members say about being careful to do everything legally and avoid any breach of the peace applies if the repo man who comes to your home is some roughlooking character with a sign on his truck that says something like (to cite a few names favored by some of the macho outfits)—Da Dawg Recovery, Guido’s Repo, Nightstalker, Predator, or Mad Dog Repo.
In a case that made national news just over a year ago, an ex-Marine and part-time preacher killed a man when attempting to repossess a car outside a mobile home at the end of a winding dirt road in Halsell, Alabama. Hearing noise just outside his bedroom window at 2:30 a.m., the lone occupant—a retired railroad worker—picked up a gun and went out to confront the intruder. Shots were exchanged and the retiree was killed. Though claiming selfdefense—saying he had only fired when fired upon—the repo agent was charged with murder. Since then, in another botched operation, two other repo men from the same company (not a TFA member) were shot, one fatally.
Across the country, there are thousands (no one knows the exact number) of wrecking and towing companies that do a sideline business in car repossession. In all but a few states, the repo business is unregulated—with no minimal training requirements, no restrictions against hiring ex-cons, and no rules forcing companies to carry accident and liability insurance to make restitution to those who might be damaged by their actions. Ron Brown, TFA’s chairman, estimates that that there may be 50 outfits of the “Two Men and a Tow Truck” variety for every one of the professionally oriented companies represented in TFA and two other professional associations, which are more overlapping than competitive, with some firms belonging to all three organizations. TFA makes training, bonding, and insurance a condition of licensing.
Though a small minority in numbers, the professionally oriented companies handle a disproportionate share of the car repo business, perhaps more than 50 percent. They work for banks, the automakers’ credit bureaus, and other lenders under contracts that give them a whole or partial franchise for doing the lender’s repossession work within a certain geographic area. The contracts stipulate a set fee per vehicle, which varies widely—anywhere from $200 to $1,000 being the normal range.
In addition, standard contracts often stipulate other fees for “skip-chasing,” which means doing the detective work needed to find someone who has disappeared with a collateralized asset (in repo lingo, a “skip” is someone who has skipped town). The farther behind in his payments a borrower becomes, the more likely he is to have moved and the harder he is to find. Up until a few years ago, most lenders commonly pulled the plug on borrowers who were 30 or 60 days late. Now they are allowing 90 and 120 days before initiating foreclosure proceedings. “Ninety days is an eternity in this business,” Altes complains. “It makes it extremely difficult to find people.”
One of two main selling points that TFA members have in dealing with lenders—and seeking payment at the upper end of the fee range—is the breadth and cooperative nature of the organization, with a list of members in every state. If, for instance, Ron Brown, in Oklahoma City, skip-traces an owner and car to Houston, he arranges for Millard Land, his good friend and fellow TFA member in Houston, to repossess the car and send it back to Oklahoma City.
The second selling point is the group’s dedication to professionalism, which means that its members are far less likely than their untrained and shady counterparts to reflect badly on a lending institution, and expose it to the possibility of major lawsuits. Any plaintiff is likely to regard a big bank (even one that has needed billions of dollars in TARP funds) as a far richer target than the little repo man it has hired to do its dirty work. There have been a number of cases of hefty settlements against banks that failed to do proper due diligence in contracting with unlicensed and untrained recovery agencies. In Brown’s way of phrasing it: “Bank of America is very concerned about who is representing it in the driveway. If he is called to the witness stand in a lawsuit, they don’t want him to be some toothless biker dude.”
Nevertheless, it has become increasingly difficult for the professional repo agencies to maintain high standards and premium prices as the lenders themselves have fallen into perilous financial straits. Over the past year, their collections departments have gotten tougher with established repo agencies—slashing fees, placing more work on a contingency basis (no car, no payment, regardless of the expense incurred in the search process), and more and more willing to farm the repossession work out to lowerpriced but less qualified companies.
Thus, even if revenues have been going up, margins have been coming down, and many TFA members complain that they are losing market share to the fly-by-night companies with almost no overhead. Altes predicts a surge in “violent, uneducated repossessions.” Skip-Chasing Casper, the
Skip-Chasing Casper, the Disappearing Con Man
One of those who has become disenchanted with car repo work (which accounts for upwards of 80 percent of revenues for most TFA members) is Ray Crocker, 62, the president of American Locators Recovery, in Nashville, and a TFA board member. At 6'3" and a heavily muscled 275 pounds, Crocker looks like a retired NFL lineman. On the theory (which I heard in some old cowboy movie) that you should always try to take out the biggest guy first when venturing into a bar that might be filled with unfriendly people, he was the first person I approached upon crashing the party.
Years ago, he worked for Ford Motor Credit Corporation as a lead supervisor in their collections department. Today he refuses to do business with the company because of their insistence that repo agents work on a strict contingency basis. That has reduced the incentive for undertaking difficult cases at the same time that increased competition from unlicensed operatives has killed profit margins in the more routine work. Accordingly, he has increasingly shifted his focus to more remunerative work in repoing office and construction equipment. Like Ron Brown and others at the top end of the repo business, Crocker is a licensed private investigator who prides himself on his investigative skills, which he regards as different, and superior, to those found in ordinary law enforcement.
To illustrate the difference, he told me the story of skip-chasing “Casper,” the chosen name of an amorous con man and biker who preyed on single working women. Casper would move in with a lady, dazzle her with his charms for several weeks, then gather up her jewelry, appliances, and other valuables, take them to a pawn shop, and disappear. He moved from city to city in this way. Several of his victims testified to his prowess on the popular Montel Williams television show.
Crocker had a contract to repossess Casper’s motorcycle. Knowing his interest in the con man, a Nashville detective invited him to join him in interviewing one of Casper’s victims. Crocker went but was furious at the way the detective ran the interview. When they got back to the police station, he told him, “I hope you never have to go out on another interview. You don’t know how to ask the right questions.” This outburst prompted an angry phone call from the district attorney in Nashville ordering Crocker to “stay the f--- out of the case. We don’t want you muddy ing up our investigation.” To which Crocker replied, “I’ve found people the FBI couldn’t begin to find. You can be sure I’ll find Casper way before you do.”
Crocker’s next move was to phone the victim for a quick follow-up interview. He asked her if she had a cell phone. She did. Did she have her last cell phone bill? Yes. Well then, Crocker told her, he’d like her to take a pen and cross out all the itemized calls on the bill that she knew she had made.
Of course, what remained were the calls that Casper had made using the woman’s cell phone. These included several calls to an unknown phone number in Panama City, Florida. When Crocker dialed the number, a woman answered and he asked for Casper.
“It’s Monk from the Grim Reapers’ Motorcycle Club in Nashville,” he replied, giving the name of Casper’s club. The Grim Reapers had their clubhouse in a forested area outside the city. Crocker had visited it during previous repo jobs.
“That’s funny. He hasn’t talked about you. But he’s off at one of the gambling boats.”
“How’s his back? It was giving him a lot of trouble.”
“It’s still hurtin’ him.”
“He’s not riding with a bad back, I hope.”
“Oh, no, the bike’s right here in my carport.”
With that last bit of information, Crocker called a local repo man in Panama City to go out and get the bike—and to tip the police off to Casper’s whereabouts. Case solved—in no more than two phone calls. He collected a $350 fee.
Flies, Wasps, and Hornets
Ron brown is considered the Red Adair of the repo business—doing the jobs that no one else can do. In addition to finding the seven prostitutes for the Texas Rangers, he traced a milliondollar oil rig that went missing from a lot in Oklahoma City to Kiska Island in Alaska’s Aleutian chain. He and a team of hired hands disassembled the rig and shipped it back to its owner.
Through various friends in the shipping business and U.S. State Department, he also traced the movement of several tons of earth-moving equipment from New Orleans—where it was fraudulently acquired by a team of Irish gypsies—to the port of Los Angeles and from there to Callao, Peru, where he and his men were waiting for it.
In chasing down $12 million worth of equipment that had already been written off by the insurance company before it contracted for his services, Brown collected a $3 million fee.
On the first morning of the conference, Brown lectured his fellow repo agents on the liabilities they faced under the Gramm-Leach-Bliley Act, the Fair Credit Reporting Act, and other laws designed to protect people against invasion of privacy and misuse of financial information.
However, even in preaching strict adherence to the letter of the law, Brown manages to express himself in a colorful way that indicates he remains forever the hunter, not the hunted. In calling attention to a kind of spider that spins its web in such a way that it traps flies but lets hornets and wasps through, he drew the moral: “I read the laws because I want to know how get through them.”
Reprising the Repo Man
Were he alive today, Alexis de Tocqueville would recognize Time Finance Adjusters as a distinctive, and even a defining, American organization: a voluntary association that has done a remarkable job in setting standards and improving conditions for its members, their customers, and the community at large.
It consists almost entirely of family-owned and operated businesses; many have been handed down from one generation to next. The biggest firms in the association have annual revenues of $3 million or more.
To the public mind, the repo man has come to symbolize the wreckage of the American dream for many people. But after spending most of three days with repo agents from around the country, I have come to think of the nation’s repo men and women more as the embodiment of the American dream: independent and resourceful people who take care of business and don’t ask anyone else for special favors—including their own government.
Andrew B. Wilson,a former Business Week bureau chief in Dallas and London, is a freelance writer living in St. Louis, Missouri.