Repossessing items can be risky business

To Tony Cooper’s employees, he’s the president of Professional Auto Recovery in Florence.

To everyone else, he’s best known as the repo man.

Taking cars, boats and jet skis from people who have defaulted on loans is a risk Cooper and his employees are willing to take.

Being assaulted by a debtor is likely, Cooper said. Someone climbing on to a tow truck to steal a car back is a more common occurrence than one would think.

“Some of them, they just get vindictive,” the Marion resident said. “You’re in the heat of the moment. You’ve got the car hooked up, and now they think ‘I’m going to try to take my car back’ and they try to keep it.”

A debtor recently decided to take a chance and retake possession of his car, Cooper said.

“He jumped in the car and drove it off the lift of the truck,” he said. “He ripped the whole bumper off the car ... and then when he was leaving, he backed into a tree, but he left the property.

The best situation is when a recoverer can take property without any contact with the owner — which is possible, since it takes less than 30 seconds to cart off someone’s vehicle, Cooper said.

The slim jim and wire coat hanger days are over because of the damaging effects on vehicle locking mechanisms, he said.

These days, Cooper inserts a specially-made wedge into the car door, which allows an easy opening.

Traditionally, most repossessions are done at night to avoid confrontation. But face-to face encounters still happen, Cooper said.

“You’re taking a 50-50 chance of getting somebody who’s nice or someone who’s a jerk that wants to push you or shove you or hit you or curse you or pull a gun on you,” he said. “You run into all kinds of scenarios in this business.”

When a debtor becomes belligerent, Cooper said his employees are instructed to back away and pursue the vehicle another day.

Still, Cooper pays more than $100,000 a year for wrongful repossession insurance, which covers his business in case an employee does something wrong.

Auto recovery workers also encounter people who are very cooperative, Cooper said.

“Some of them are like, ‘You caught up with me, let me get my stuff out of the car,’” he said. “(Others), we’ll tell them you can contact the bank on getting you car back and they’ll say ‘... (to heck with) the bank.’”

People think a slumping economy riddled with bank failures, foreclosures and defaulted loans would equal big profits for companies in the repossession business, but they’re wrong, Cooper said.

He said he’s seeing his profit margins drop because the banks he works with are reluctant to give up on defaulted car loans.

“The banks are just holding out so long before they put out any repos now, they are trying to work with customers,” he said “In their eyes, the way to save the loan is to give people more time ... they are just making it harder (for us).”

If a bank waits three to four months to initiate a repossession, it’s even harder for Cooper’s workers to recover the vehicle because he said 80 percent of debtors have moved from their last known address.

Rick Saunders, CEO and president of First Reliance Bank, said bankers in general try to avoid repossessing property.

“We’re in the business of lending money. We don’t make a living off of taking collateral back; we make a living off the interest on the things we make loans on,” Saunders said. “I’ve never had the pleasure of taking a car back and coming out ahead. You can pretty much bank on the fact we’re going to lose money. It’s certainly not in our best interest to take a car back.”

First Reliance personal bankers try to restructure a loan for their clients or work with them to liquidate the property, Saunders said.

But if a bank client is unable or, unwilling to make the payments, then the bank has to take action, Saunders said.

“Is it a capability issue or is it a character issue? If it’s a character issue, then we work very aggressively to end the relationship,” he said. “Because you’re dealing with an asset that’s not earning any interest for you and typically with cars you’re using an asset that’s depreciating in value.”

Despite the down turn in the economy First Reliance didn’t see an increase in defaulted car loans. “We don’t see big swings even when the country as a whole is challenged. When you hear about a national crisis going on, it tends to not affect the Pee Dee on the same scale.”

While the Palmetto State seems to be holding its own when it comes to auto loans and mortgages, states such as Nevada, Florida and California are the ones having major problems, Saunders said.

And those are the states where repossessions companies are bringing in record-setting profits, Cooper said.

But in the Carolinas, the situation is different.

“Fuel’s killing us. We burn more fuel running (repo assignments) and the banks aren’t paying us any extra on the repos because they just flat out won’t do it,” Cooper said. “We spend $14,000 a week on fuel when we use to spend $4000 a week on fuel.”

Professional recovery workers spend the bulk of their days trying to locate debtors’ neighbors and employers, in addition to doing Internet searches.

“If you ask them something and they think you’re trying to find somebody, they’ll clam up on you,” he said. “It’s hard to get anything out of anybody anymore.”

Professional Auto Recovery has 24 trucks that do repossessions in the Carolinas, Cooper said.

Because of the hassle that comes with dealing with his company’s 1,200 open accounts, Cooper said, he and other professional recovery workers would like to charge the banks more. But that’s nearly impossible, he said, because the banks will just hire anybody off the street.

“We’re bonded and insured. I don’t have a 500-dollar-a-month shack I’m operating out of, or just a pick up truck and a wheel dolly,” he said.

Until South Carolina regulates the auto recovery industry the struggle between recoverers and the banks will continue, Cooper said.

Even with all the hardships, Cooper said he’s enjoyed being in the business for 18 years.

“All you can do is hold your own right now,” he said.” Everybody’s got a job to do, everybody’s got a place in this world and you’ve got to make a living.”