Westlake Financial Services is a significant name in the auto finance industry, particularly known for providing loans to car buyers with subprime and near-subprime credit. If you’re one of their customers, especially if you’ve faced financial difficulties, you might be concerned about repossession. The question, “Can Westlake Financial repo your car?” is a serious one for many borrowers. This article delves into Westlake Financial’s repossession practices, your rights, and how to respond if you’re facing this situation.
Understanding Westlake Financial Services
Westlake Financial Services, officially Westlake Services, LLC, is headquartered in Los Angeles, California. They operate under the tradename Westlake Financial Services and are part of the Hankey Group. Boasting a network of over 50,000 dealerships across the United States, they are a major player in auto financing, particularly in the subprime market.
Subprime loans cater to individuals with credit scores typically below 600. These loans come with higher interest rates due to the increased risk of default associated with borrowers in this credit range. Westlake Financial’s focus on this market segment means many of their customers are already in a precarious financial situation, making the threat of repossession a very real concern.
Alt text: Ian Anderson Westlake Financial Group President leadership.
Westlake Financial and Vehicle Repossession: What You Need to Know
The straightforward answer to “Can Westlake Financial repo your car?” is yes. Like any auto lender, Westlake Financial has the right to repossess vehicles if borrowers default on their loan agreements, and missing even a single payment can trigger this process.
A real-life example underscores this point. Consider the case of Rashana Williams from Tampa, Florida. Even though Ms. Williams owned her car outright, it was wrongfully repossessed due to a mix-up involving Westlake Financial. Despite her attempts to resolve the issue and explain the error, Westlake initially offered no cooperation. This case, although involving a wrongful repossession, highlights Westlake’s readiness to act swiftly, even if mistakenly, in repossession scenarios. It also demonstrates the stress and financial burden repossession can place on individuals, as Ms. Williams faced transportation issues and rental car expenses.
Alt text: John Schwartz Westlake Financial Senior Legal Analyst.
After legal intervention, Westlake Financial acknowledged their mistake, with John Schwartz, Senior Legal Analyst, initially claiming the repossession was an error. Subsequently, their legal team negotiated a settlement, further emphasizing the importance of understanding your rights and seeking legal counsel when facing repossession issues with Westlake Financial.
Alt text: James Randolph Liebler II attorney at Liebler Gonzalez and Portuondo.
Defending Against a Westlake Financial Lawsuit for Deficiency Balance
If Westlake Financial repossesses and sells your vehicle, and the sale price doesn’t cover the outstanding loan balance, you could be sued for the “deficiency balance.” However, there are legal defenses available to challenge such lawsuits.
Commercially Reasonable Repossession and Sale
The Uniform Commercial Code (UCC) mandates that every aspect of a vehicle repossession and sale must be “commercially reasonable.” This includes the method, manner, time, place, and terms of the sale. Westlake Financial must adhere to specific steps:
- Notice of Intent to Sell: You are legally entitled to a notification of Westlake’s intention to sell your repossessed vehicle at least 10 days before the sale. This notice must be properly timed, delivered, and contain specific content outlining your rights and the details of the sale.
- Maximize Sale Value: Westlake is obligated to pursue the best possible return when selling your vehicle, whether through a public auction or private sale. Private sales are often scrutinized more heavily by courts if the commercial reasonableness of the sale is challenged.
- Proper Application of Sale Proceeds: The proceeds from the vehicle sale must first cover the costs of repossession and sale. The remaining amount should then be applied to your outstanding debt. Any surplus after covering the debt and associated costs should be returned to you.
If Westlake Financial fails to meet these requirements, it could be a defense against a deficiency lawsuit.
The Holder in Due Course Rule
The Holder in Due Course Rule offers protection to car buyers, particularly when their loan contracts are sold from dealerships to lenders like Westlake Financial. This rule ensures that if the dealership engaged in fraudulent practices or misrepresentations during the car sale, you can raise these issues as defenses against Westlake Financial, even though they purchased your loan contract.
For example, in a Florida case involving Danielle Gump and Westlake Financial, Ms. Gump purchased a vehicle with undisclosed major defects from a dealership. The sales contract contained the Holder in Due Course clause. When Westlake Financial sued Ms. Gump for a deficiency balance after repossession, she successfully used the dealership’s misconduct as a defense against Westlake’s claim. This case demonstrates the power of this rule in protecting consumers.
Furthermore, the contract language often includes clauses about attorney’s fees. In Ms. Gump’s case, the contract stated Westlake could recover attorney’s fees from her in case of default. Florida law reciprocates such clauses, meaning Ms. Gump was also entitled to recover her attorney’s fees from Westlake because she prevailed in the lawsuit.
Statute of Limitations
There are time limits for debt collection lawsuits. In Florida, the statute of limitations for breach of written contract is five years. This means Westlake Financial must file a lawsuit for a deficiency balance within five years from when the deficiency was established. If they file suit after this period, the statute of limitations can serve as a valid defense.
Westlake Financial’s Legal Scrutiny: Department of Justice and CFPB Actions
Westlake Financial has faced scrutiny from government agencies, highlighting patterns of potentially problematic practices.
Department of Justice Lawsuit
In 2017, the Department of Justice (DOJ) filed a complaint against Westlake Financial for violating the Service Members Relief Act (SCRA). The DOJ alleged that Westlake Financial unlawfully repossessed at least 70 vehicles from service members protected by the SCRA. This resulted in a settlement requiring Westlake to pay over $700,000 to affected service members, a civil penalty, and increased monitoring.
Further DOJ investigations revealed issues with Westlake’s handling of interest rate benefits for service members, noting delays and incorrect application of benefits.
Consumer Financial Protection Bureau (CFPB) Action
The CFPB also took action against Westlake Financial and its subsidiary, Wilshire Consumer Credit, for deceptive debt collection practices. The CFPB’s consent order required Westlake to provide substantial redress and balance relief to borrowers ($44.1 million) and pay a civil penalty ($4.25 million).
Alt text: Consumer Financial Protection Bureau CFPB logo.
The CFPB found that Westlake engaged in illegal and deceptive tactics, including:
- Deceptive Calling Practices: Using a service to mask caller ID and impersonate various entities (like repossession companies or even family members) to trick borrowers into answering calls and revealing vehicle locations.
- False Threats and Misrepresentations: Falsely threatening criminal prosecution, misrepresenting amounts needed to release repossessed vehicles, and creating false urgency about imminent repossession.
- Improper Disclosure of Information: Sharing borrowers’ loan details with employers, friends, and family.
- Deceptive Loan Modification Practices: Failing to transparently disclose that loan modifications like due date changes or extensions would result in increased interest payments.
- Misleading Advertising: Wilshire Consumer Credit was cited for misleadingly advertising monthly interest rates on title loans without clearly presenting the annual interest rate.
These actions by the DOJ and CFPB demonstrate a history of regulatory concerns surrounding Westlake Financial’s practices, particularly in debt collection and treatment of borrowers.
Frequently Asked Questions About Westlake Financial Repossession
Q: After how many missed payments will Westlake order repossession?
There’s no set number. Westlake Financial can initiate repossession after just one missed payment, although the exact timing can vary.
Q: Is Westlake responsible for the actions of its towing companies?
Yes. Under Florida law and similar regulations in other states, Westlake Financial is responsible for ensuring that repossession companies they hire do not “breach the peace” during a vehicle repossession. Breaching the peace includes actions that disrupt public order or involve illegal entry or property damage. Westlake and their agents cannot break locks, damage property, or illegally enter private property during a repossession.
Conclusion
“Can Westlake Financial repo your car?” The answer is unequivocally yes. Understanding Westlake Financial’s practices and your rights is crucial if you are a borrower, especially if you are facing financial hardship. Knowing your defenses against deficiency lawsuits, being aware of their history of regulatory scrutiny, and understanding the rules around repossession can empower you to protect yourself. If you are facing repossession by Westlake Financial, seeking legal advice is highly recommended to ensure your rights are protected throughout the process.
