Richard Read reports:
Ever had the feeling you were being watched? If you’ve taken out an auto loan in recent years, your hunch may have been correct, and now, the U.S. government is investigating.
It’s not uncommon for lending institutions to require that borrowers equip their new vehicles with GPS devices and other gadgetry. These devices keep tabs on cars, which are, in fairness, the lenders’ property until loans are paid off. If a car goes missing, lenders can use GPS to locate it, and in some cases, even disable the ignition.
As you might guess, the practice is most commonly used on subprime borrowers, who statistically have highest risk of falling behind on payments and defaulting on loans. However, the Federal Trade Commission is concerned that some lenders take the practice too far, gathering too much irrelevant data on borrowers and violating their privacy.
And so, it’s launched an investigation into the matter. At least one company, Credit Acceptance Corporation, has admitted that the FTC has asked for details about its policies regarding the use of tracking and disabling devices.
Read more on Car Connection.