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Comment by aneutron | Hacker News Reader

While this is an "interesting" story, I'd love to get some verification on it.

It sounds plausible, but almost illegal ? I'm in EU so don't know how really things work over there, but I would assume Tesla would need a judicial order siding with the bank to be able to do this ? I mean it's probably not the wild west over there. Or is it ?

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In the US this is legal. Banks are authorized to repossess property if you’re late on a payment^. Private companies are allowed to participate in repossession as long as they don’t break any other laws. Tesla didn’t break into the owner’s house to steal their passwords or keys, they didn’t assault the owner. All they did was take his car. They verified that they were taking the correct car. Since the repossession was being carried out on behalf of a bank, there was no theft. This is completely legal. If you don’t want a car company to assist a bank with repossession, don’t get a car with remote access features- which pretty much means an old car.

^There are rules on how late you have to be though- it’s not like they are taking your car after you’re 1 day late for the first time. The required amount of lateness depends on the state. And they are only allowed to take property that was used to secure the loan. In the case of a car loan that is usually the car itself.

Thanks very much for the answer. I assumed that it would have to go through the judiciary, but I am surprised to see it's not the case.

It does make sense, especially if it's not abusive (e.g. one month behind equals reposession)

The other big thing at play here, is that car lenders get about 1/3 of the expected loan value if they repo the vehicle. Most of them don't want to do it unless they have to, it's usually far more profitable if the consumer continues making payments.

The court typically only gets involved if the lender has reason to believe you might do something malicious and can convince the court to execute an immediate right to seize the vehicle (quickly after default). A court can also order a person to return the vehicle, if they've managed to successfully evade the repossession action by hiding it. This is a good thing so long as it's reasonably balance (ie the consumer doesn't get their vehicle repo'd on day one of being late), so our court system isn't filled up with car loans.

It doesn't go through the judiciary (e.g., it would if it were an an apartment and you stopped paying rent), but the owner signs a loan note that specifies that the loan is in default after missing N payments (usually after 3 months). Once in default, the bank can repossess the vehicle, but they'd rather not since their business is lending money and anything else is a money-losing distraction. So they will usually try to find a way for you to keep the car (and keep making payments). They usually only repo if they can't contact the debtor or they can't come to an agreement.

Repossession of any kind (car, house, etc...) is typically an option of last resort for the bank after the debtor refuses to work with them or enter into other agreements that could help. They really just want to keep collecting payments from you.

> Private companies are allowed to participate in repossession as long as they don’t break any other laws.

Why do they do this? Did the bank pay Tesla to do so? (I'm sure there must be some incentive system here).

The incentive is that the banks remain willing to finance the purchase of Tesla vehicles.

This is a report based on a Facebook post by a random person telling a story about her repo friend who once told her that Tesla could help him get control of the car.

Until someone reports this happening first hand, I'm going to assume that either a lot of details are missing or that the story is straight-up fake.

There are far too many articles or tweets or stories they get traction with zero attempt at verification. I do not understand why people upvote it.

It's not even that interesting. Owner doesn't pay bill on an item being used as collateral. Said item is repossessed.

I hope the repo person realizes the future will need that type of job less and less.

Nope, it won't. Ask anyone who ever lent money and they'll tell you that lending is actually the easiest part, now getting repaid is where most of the work goes into. Heck, you probably yourself can remember an acquaintance of yours who once borrowed figurative $20 from you and never returned them.

I think the surprise or even incredulity people over here in the EU have is not to do with "You don't pay for your stuff, we take the stuff back" (I think we're all familiar with the concept of paying for things), it's to do with how the seller remotely took actions on the item.

It's a bit like not keeping up your mortgage repayments, and the bank remotely locking you out (or in?) your house — except it's a bit worse, because the mortgage provider wouldn't have to use GPS to track where you and your house are. Perhaps that's not a shocking idea in the USA, but I think it is in the EU. I'm not for or against, just explaining where the shock factor is coming from here.

Now for my own opinion: The header here shouldn't be "Make sure you keep up your repayments", it should be "Don't buy stupid shit you don't need, can't afford, and is controlled by someone else".

I think the mention of a bank is misleading. I think in this case the owner organised finance with Tesla directly. When he failed to pay Tesla on time they repo'd the car themselves.

That would make much more sense.

Ahhhhh. This does make a lot more sense.

Tesla loans are through a bank, but I think they use their own financing arm for leases, so perhaps this was a delinquent lease.

> I'm in EU so don't know how really things work over there, but I would assume Tesla would need a judicial order siding with the bank to be able to do this ?

If a car was used as collateral for a loan, then bank would need a judicial order. But common way to buy a new car is leasing, where the car is owned by the leasing company during the period of the contract. If the contract says that lease is terminated when payments are not done, then i do not see why would leasing company need judicial order, when it is legal owner of the car (unless there is a specific legislation related to such kind of leases).

Yeah, it's weird how a random Facebook post with no evidence is the basis for this story. It's one thing if your aunt believes it. It's another if some content farm posts it as fact. It's quite embarrassing to see such an article on the front page here though.

It's probably possible, and dealerships usually work with repo men/banks, but the point is, the article certainly did nothing to verify anything.

We do not have Repo in EU like they do in the US.

Are you sure about that? I thought repossession of collateral from a defaulted loan is a basic part of cultures with both common and code law.

https://www.frenchentree.com/french-property/law/so-you-cant...

What happens if you don't pay your mortgage where you live?

Then you have to go through some government entity for repossession etc. But for sure we don't have it where some tow truck driver comes to your property pulling out the car.

Usually, in the end, it's a government agent coming to you and repossessing things, not an employee of a random company.

This doesn't fall under the remit of the EU.

I suppose it really depends on exact legal contract. Is the financing that is loan against the vehicle and it is owned by the user. Or is it essentially rented.

And in first case even with court order there is good question about other creditors...

While potentially completely unrelated, I've seen how "cowboy-like" the whole bounty hunters situation is over there, so it honestly and unfortunately wouldn't surprise me as much if it were the case with the creditors ...

(probably wrong statement follows) In the US, title to the vehicle usually remains in the hands of the creditor until it’s paid off.

Th title is in the owners name with a note of a bank lien on it. When you sell the car the bank lien is settled first and then the transfer can begin. In most cases you can’t register the car without the title and you cant drive the car without it being registered.

Interesting. It must be recorded at the county or something then? I haven’t seen a title for a vehicle in quite some time.

My state it's all electronic now. I have a paper title for my records but the it's just a fascimile of the digital original. To complete the sale I'd need to bring it into the tax collectors office where they update the digital record and print a new paper title for the next owner or do it at a dealership.

A lot of law enforcement is privatized in the USA so a lot of things that would be very illegal in most EU countries is ok there (fx bounty hunters)

Bounty hunters are uncommon in the US and very little of the law enforcement system is privatized in the US. It's in fact rare compared to the number of government law enforcement officers we have (local cops, county cops, state cops, federal cops, prison & jail cops, specialized, etc).

Having eg a private security guy working at your grocery store is not privatized law enforcement. That's the equivalent of a bar bouncer watching the property, not the equivalent of law enforcement and they don't have the legal powers of law enforcement either.

You are probably right when I say a lot, it was thought of as relatively to most of the EU.

But the fact that bounty hunters and "repo" like in the article exists makes it a lot to me.

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