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pros and cons of personal property and redemption fee models

PROS AND CONS: Personal Property and Redemption Fee Models Used in Auto Repossession Management

One of the hottest compliance topics in the industry over the past year is the handling of personal property and redemption fees. CFPB’s concerns over treatment of customers has resulted in significant changes by most lenders. Auto lenders have changed their approach to handling personal property and redemption fees to one of the emerging five models:

  • Fees charged are up to agent and collected by agent
  • Fees charged are up to agent and billed to lender
  • Lender sets allowable charges and are collected by agent
  • Lender sets allowable charges and are billed to lender
  • All in one pricing

As a nationwide repossession management company, we work with many lenders which have allowed us to gain further insight into the handling of personal property and redemption fees. Here are the pros and cons of each of these models.

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