Post Number: 837
|Posted on Thursday, May 08, 2003 - 07:49 pm: ||
Found this case when I called the number for Portfolio Recovery on the CSC credit report and it was answered by TranSouth.
I'd sure like to know what happened with that case!
According to the complaint, TranSouth conspired with Charlie Falk's Auto Wholesale, Inc., and JB Collection Corporation, both of Norfolk, Virginia, to effect an automobile "churning" or revolving repossession scheme. Falk's sold used vehicles at inflated prices, offering to arrange financing at interest rates as high as thirty percent.
Under the terms of the financing contracts, Falk's retained a security interest in the vehicles pending full repayment of the loan by the borrower. Falk's then assigned the secured notes to TranSouth, agreeing to buy back the notes for a fixed price - - usually $1,000 to $1,500 - in the event of the borrower's default.
If a borrower missed a payment, TranSouth had the vehicle repossessed.1 It then mailed a"Notice of Private Sale," giving the borrower an opportunity to redeem the vehicle.2 Any vehicles that were not redeemed were retransferred, with the accompanying notes, to Falk's for the prearranged consideration.
Upon repurchasing the notes, Falk's assigned them to JB, its wholly- owned subsidiary. JB then demanded payment from the borrowers for the "deficiency" between the loan balance and the price obtained by the "sale" of the vehicle, i.e., the retransfer price. If the borrower failed to pay, JB filed a deficiency action in state court for the stated amount. On occasion, JB also claimed attorney fees of twenty-five percent, notwithstanding that it had filed suit without the assistance of counsel.