The percentage of auto loans that were at least 90 days delinquent increased to 3.8 percent in the fourth
quarter from 3.6 percent in the third quarter, according to the Federal Reserve Bank of New York
In determining whether to take action, the Federal Trade Commission must first decide whether the benefit
to consumers — in this case the availability of auto loans — outweighs the privacy problems.
Some find it unsettling that the technology gives lenders so much control over borrowers — particularly poor borrowers, who typically have no choice
but to accept the device if they want a loan to buy a car.
Auto loans to Americans with poor credit have been booming,
and many finance companies, credit unions and auto dealers are using technologies to track the location of borrowers’ vehicles in case they need to repossess them.
“Location data is very sensitive.”
If the federal agency determines that the devices are being used unfairly or deceptively, it could force companies to stop the behavior
and devise procedures and monitoring to ensure that customer privacy is better protected.
But privacy experts and many borrowers who have the devices in their cars say there is great potential for abuse, particularly
because the devices fall outside traditional state and federal lending laws.
