REPOSSESSION, CAUSES OF ACTION
Under New Jersey law, a company who is repossessing a consumer vehicle has an obligation to comply with all applicable laws. This means that if a repossession company breaches the peace in the context of repossession, the individual who has been aggrieved by this act would have a claim against both the repossession company and the finance company who hired this repossession company. The duty to make sure that there is no breach of the peace is a non-delegable duty. This means that the finance company who has owed the money is ultimately responsible for the actions of the repossession company to make sure that all of the laws are complied within the context of repossession.
Ultimately, the repossession company usually carries an extensive insurance company to cover any conduct with regard to improper repossession. Therefore, if the repossession company, the marketing company and/or the finance company are sued in the context of an improper or wrongful repossession, it is ultimately the insurance company from the repossession company who will be responsible for any and all losses. Many times there are agreements between the repossession company and the finance company with regard to repossession. This means the repossession company has agreed to be responsible, in writing, for any damages associated with the wrongful or inappropriate repossession of a vehicle. This is the way the finance companies protect themselves, with the signed agreement, with the repossession company to make sure that there is insurance coverage to cover the finance company. As an example, if a repossession company were to get into a fight with the owner of the vehicle, break into the owner’s house or conduct other illegal or inappropriate actions, the finance company could ultimately be responsible for any damages in this case since the duty is a non-delegable duty with regard to the repossession. There is also frequently an intermediary company which is hired by the finance company to farm out the repossession to another party. Therefore, when investigating these claims, there are frequently additional parties which are not disclosed at the time of the repossession.
The Uniform Commercial Code contains most of the rights and remedies for those being aggrieved of a wrongful repossession. The New Jersey Consumer Fraud Act would also apply to the wrongful repossession of an automobile. The Uniform Commercial Code contains specific statutory damages if there were to be a wrongful repossession. Statutory damages are required damages to be awarded by the Court if the plaintiff were to prove a wrongful repossession. This is one of the benefits to making these claims. However, there is some dispute under the Uniform Commercial Code as to whether or not attorney’s fees would be recoverable under the Uniform Commercial Code for a wrongful repossession. Nonetheless, the statutory damages could potentially equal the amount of the finance charge with a 10% add-on pursuant to the Uniform Commercial Code. It is likely that any conduct which would violate the Uniform Commercial Code would also violate the New Jersey Consumer Fraud Act or the Truth in Contract and Warranty Act. As an example, if the repossession company were to lie to an individual who is having the vehicle repossessed stating that they were with the police or an official agency, they would probably be subject to violations of the New Jersey Consumer Fraud Act as well as the Uniform Commercial Code.
REPOSSESSION, CAUSES OF ACTION