Due Diligence and Ongoing Monitoring

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  • 1.  Collateral Recovery/Repossession Companies

    This message was posted by a user wishing to remain anonymous
    Posted 02-21-2024 02:55 PM
    This message was posted by a user wishing to remain anonymous

    Is anyone willing to share what due diligence documents you from Collateral Recovery/Repossession Companies.  I am getting some push back for trying to collect their repo license and a certificate of insurance.

  • 2.  RE: Collateral Recovery/Repossession Companies

    Posted 02-22-2024 12:38 PM

    When assessing repossession vendors, consider industry standards specific to the state where they operate. In California, certain requirements must be met, including having proper insurance coverage and a repo license. The type of insurance needed depends on your organization's specific requirements and contractual agreements. Here are some key aspects to verify during due diligence:

    1. Insurance Coverage and Limits: Basic coverage should include workers compensation, automobile liability, garage keepers, cargo on-hook, and employee dishonesty coverage.

    2. Handling Customer Complaints: Evaluate how vendor addresses customer complaints.

    3. Personal Property Handling: This is crucial in the industry; ensure vendors handle personal property appropriately as it impacts consumers.

    4. Repo License and Business License: Confirm that vendors hold the necessary licenses.

    5. Client-Facing Procedures: Examine procedures related to breach of peace requirements.

    6. Employee/Agent Training and Certification: Industry standards, such as CARS or SAS by Eagle Group, may apply.

    Majority of these vendors are small-scale providers and may not have all requirements documented. In such cases, having a well-defined contract or agreement becomes essential. Note that forwarders and aggregators may use these vendors as 4th parties to provide service as well.