Tri-Force and Ally Financial Sued for Wrongful Repossession in Indiana

The Indiana Consumer Law Group/The Law Office of Robert E. Duff announces the recent filing of a lawsuit against Tri-Force, Inc., UAR Direct, LLC and Ally Financial Inc. in the United States District Court for the Northern District of Indiana. The lawsuit alleges that agents of Tri-Force breached the peace when they attempted to repossess a vehicle from our client and then, when our client physically resisted the repossession (as was his legal right to do), engaged the police to coerce our client to relinquish possession of the vehicle and thereby accomplish the wrongful repossession. The lawsuit seeks an award of actual and punitive damages, among other relief.

Our office has noticed a disturbing trend of more aggressive repossessions in 2017. It seems that some repo agents will say or do whatever is necessary to accomplish the repossession whether it is legal or not. We believe that stiffer competition and lower profit margins caused by many finance companies’ use of forwarders is partially to blame, combined with the compensation structure used by the repossession industry as a whole. Typically, repossession agents only get paid if they take the vehicle. This creates a strong financial incentive to take the vehicle using whatever means necessary.

It has long been Indiana law that a self-help repossession – a rare delegation of the state’s exclusive prerogative to resolve private disputes in the courts – may only be accomplished if it can be accomplished without a breach of the peace. See Census Fed. Credit Union v. Wann, 403 N.E.2d 348, 350 (Ind. Ct. App. 1980). A potential repossessor must immediately desist upon meeting any resistance – verbal or otherwise.  Id. at 352. This means that simply telling a repo agent that they can’t take the car is enough – legally, anyway – to stop a repossession. A repossession that occurs after such resistance is in breach of the peace and is therefore illegal.

Another disturbing trend we have noticed is the use by repossession agents of the police to help accomplish the repossession. The scenario goes like this:

Repo agents show up at the consumer’s residence. The consumers sees the repo agents, confronts them and tells them they can’t take the car and to get off the consumer’s property. Repo agents retreat to the street and call the cops. The cops show up and tell the consumer the repo agents have valid paperwork and therefore have a right to take the car. For fear of being arrested if the consumer continues to (lawfully) resist the repossession, the consumer reluctantly lets the repo agents take the vehicle.

THIS IS A WRONGFUL REPOSSESSION! Unfortunately, police agencies are not training their law enforcement officers in this area and the police officers don’t know the law. The officers wrongly believe that repo agents who have paperwork showing the lienholder has ordered a repossession are entitled to go onto a consumer’s property and repossess a vehicle even over the consumer’s resistance. That simply is not true. A repo agent may go onto private property to accomplish a repossession (but not into any closed building or through any closed gate), but legally must cease and desist immediately upon being told they can’t take the car or to get off the consumer’s property. Remaining on or immediately returning to a consumer’s property after having been told to leave is an illegal trespass.

Unfortunately, we suspect that the economic forces at work will continue to cause an increase in breach-of-peace repossessions in 2018. If you believe you have been a victim of an illegal breach-of-peace repossession, please contact us here.  We wish everyone a Happy New Year!