The New York Times wrote a good article a couple of weeks ago on a phenomenon I’m seeing more and more in my car fraud practice: used car dealers are now installing GPS and SID (Starter Interrupt Devices) on the cars they sell. While everyone knows what a GPS does, these GPS devices don’t sit on the dashes of cars and help drivers navigate to their destinations. Instead, they allow dealers and finance companies to track the whereabouts of cars for repossession.
Meanwhile, the Starter Interrupt Device is less well-known and even more dangerous. It does exactly what it says it does: it allows a dealer or finance company to interrupt (i.e. prevent) the car from starting. Dealers and finance companies can “flip the switch” on the SID remotely. So, they never have to leave their office (and sometimes can deploy it from a smartphone) and with the flip of a digital switch can make a vehicle stop working. (If properly installed, the SID will not stop a vehicle that is in motion, but that does not fix the safety concerns of being stranded.)
Some dealers disclose the existence of these devices to consumers, some don’t. Those who do disclose their use of the device often try to explain that these devices “help locate the vehicle if it is stolen”. While that may be true, the actual purposes are to a) locate the vehicle for repossession and b) incentivize the consumer to make payments by preventing the consumer from using the vehicle if he or she misses a payment.
The used car industry’s expanding use of these devices raises many potential legal issues that have yet to be litigated in Kentucky. A leading attorney advising the used car industry has described both 1) failing to disclose a GPS or SID and 2) charging consumers for the devices as among the “Ten ‘Worst Practices’ for Dealers”. Failing to disclose the existence of a GPS and/or SID on a new or used vehicle may be a violation of the Motor Vehicle Retail Installment Sales Act.
Another area ripe for abuse is in the repossession of a vehicle by use of a Starter Interrupt Device. Aside from the safety issues raised by someone crippling a vehicle remotely, a dealer’s use of a Starter Interrupt Device can potentially violate, among other laws, the Uniform Commercial Code and the Kentucky Consumer Protection Act.
If you discover that a car dealer sold you a vehicle equipped with a GPS or SID unit without disclosing it to you, you need to contact an attorney to explore your legal rights. You can find a consumer attorney in your state at the National Association of Consumer Advocate’s website.