Owner sues after loan company disables truck

By Bill Donovan
Special to the Times

WINDOW ROCK, Jan. 26, 2012

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A Michigan-based finance company is alleged to be electronically disabling vehicles on the reservation when the owners fall behind on their payments, in violation of Navajo law.

Veronika Fabian, a former DNA attorney now based in Chandler, Ariz., makes the allegation in a class-action suit filed against the Credit Acceptance Corp. on behalf of Deanna Begay of Chinle.

Begay said she missed a vehicle loan payment and then found herself stuck five hours from home in the vehicle the lender had disabled by remote control.

The basis of the suit centers around recent technology that allows car dealers and finance companies to put GPS systems and vehicle starter interruption devices on cars that they sell, so the vehicles can be repossessed easily in case buyers don't make their loan payments.

The issue here, said Fabian, is whether these devices can be used while a vehicle is on the reservation.

It's perfectly legal to use them if the driver is outside the reservation, she said, but consumer protections are stronger under Navajo Nation law. Navajo law requires that the lender get approval from a tribal court or get a voluntary release signed by the buyer before repossessing a vehicle.

Fabian was a DNA attorney from 1994 to 2003, a time when dealers and finance companies made it a practice to come on the reservation and repossess cars without going through the tribal court system.

"We are definitely seeing less of that these days," she said, mainly because some buyers filed lawsuits against the dealers and won extra protections that apply on the reservation.

In response, dealers and finance companies found other ways to get the vehicles. They hire towing companies to go around parking lots of shopping centers in border towns, looking for vehicles whose owners are behind in their payments.

The practice is so pervasive that Walmart officials in Gallup have warned the towing companies that if they come onto their parking lot to repossess cars, the company will call the police and have them arrested because it's private property and their customers have a right to shop there without worrying about their cars being snatched.

The auto sellers and loan companies also tried this approach at Fire Rock Navajo Casino, until they were reminded that the casino is on Navajo land and tribal laws apply.

Begay said she purchased a 2008 Dodge Ram from Tate's Ford in Holbrook, Ariz., on Feb. 5, 2011. Tate's turned over the financing to CAC.

The contract she signed included a form saying the finance company could prevent the vehicle from starting and use GPS to locate the vehicle if payments were not made on time. The company said the form had to be signed in order to get financing.

This form said that if the lender exercised the right and disabled the vehicle, the buyer would have to contact CAC and bring her account current before the car would be able to start again.

"If my contract is not promptly brought current, CAC will take all actions permitted by applicable law to repossess and sell the vehicle," the form stated.

Begay missed her first payment, due March 7, but said she planned to make it on March 19 when she got a paycheck.

On March 18, she drove the pickup from Chinle to Crownpoint on a personal errand, taking her 3-year-old son. Afterward she went out to the parking lot and it would not start.

She thought at first that there was something wrong with the vehicle and "felt stranded, alone and scared because she had her little boy with her," the lawsuit stated.

Begay then remembered that a starter interruption device had been installed in the vehicle, so she called Tate's and CAC. Officials at CAC told her that they had disabled the vehicle because she was behind on her payment.

The company allowed the pickup to start again after she said she would make the payment the following day.

Begay's complaint points out that when the device was activated, the pickup was within reservation boundaries and the lender did not possess an order from any tribal court allowing them to do that. Begay had also not agreed at the time to allow it.

The lawsuit contends that CAC routinely activates the devices on vehicles that are on the reservation, even though this "has the potential to strand members of the Navajo Nation in a remote location without the use of their vehicle."

"This was one of the harms the Navajo Nation law prohibiting self-help repossession was intended to prevent," the lawsuit stated.

By disabling the starter, the company has "constructively repossessed" the vehicle in violation of tribal law, which requires a court order or customer agreement, the suit said.

Begay is seeking a minimum of $5,000 in damages.

Fabian has filed the case as a class action in order to allow other tribal members who have had similar problems with CAC to join the suit.

The lawsuit also challenges the company's attempt to prevent such suits. One of the forms that Begay was obliged to sign to get her vehicle loan requires all disputes to be resolved on an individual basis through arbitration.

"Representative actions, such as class actions, are prohibited," the form stated.

Her lawsuit claims that this provision is unfair since "this is the only viable method for consumers to bring claims like the claim brought by Ms. Begay."

Officials for CAC had no immediate response to the lawsuit, saying that any questions regarding repossessions had to be made to a special 800 number set aside to handle questions regarding repossessions. But officials there said they could not comment on any lawsuit and that if any statement would be made, it would be done by the company's attorneys.

The CAC Web site said it has nearly 7.4 million customers approved since 1991.

Tribal members interested in joining the suit can contact Veronika Fabian at 480-517-1400, or the Choi and Fabian law firm in Flagstaff at 928-779-2226.

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