Miss a finance repayment? You could be left stranded
Ruthless finance companies are installing ‘kill switches’ that could leave drivers stranded if they miss a payment.
An investigation by the Daily Mail has revealed that a number of lenders are using the devices when loaning money to customers with poor credit scores – but experts have warned that they might be against the law.
The kill switches use a black box located behind the dashboard. When the customer makes a payment, the finance company will send a code which can be entered into the black box to mobilise the vehicle.
If a payment is missed, the company will withhold the code and the customer won’t be able to start the car. This has led to complaints that vulnerable motorists could be left stranded – but the finance companies say they’re given warning to prevent this happening.
When a payment is overdue, the black box will beep 24 hours before it immobilises the car. In that time, the customer can make a payment in exchange for a code to prevent the car being disabled.
Although regulators don’t know for certain whether the devices – which are said to be a ‘last resort’ for finance companies – are legal, they’re expected to form part of a probe into car finance by the Financial Conduct Authority.
According to Auto Express, finance provider Stoneacre has reported a 500 percent cut in the number of default rates since introducing the black box.
The Car Finance Company describes its black box as ‘payment reminder technology’ and says it’s intended to help out drivers with poor credit. It emphasises that the black box doesn’t affect how the car runs or monitor how it’s driven.
Source: Daily Mail, Auto Express