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Repossessions: 13.11.3.2.10 Does the arbitration agreement apply to the dispute and to the parties?

In general, only the parties to the arbitration agreement are bound by the agreement.686 While the creditor’s assignees and agents may be able to invoke the arbitration requirement, other third parties, such as independent repossession companies, debt collectors, police officers, or third parties not explicitly mentioned in the arbitration agreement, may not be able to do so.687 Similarly, consumers (such as family members) who do not sign an arbitration agreement are generally not bound by

Repossessions: 13.11.3.2.11 When arbitration clause excludes self-help remedies

Many creditors, seeking to preserve their own judicial and self-help remedies, draft their arbitration clauses to exclude from the arbitration requirement claims relating to replevin and repossession.694 The meaning of such a clause is a matter of contract construction, and it may be possible to construe it to allow both the creditor’s and the consumer’s repossession-related claims to be litigated in a judicial forum.

Repossessions: 13.11.3.2.12 When usury voids the contract

One might think that a usurious or illegal contract that is unenforceable under state law would also mean that the arbitration requirement is unenforceable. But the United States Supreme Court has stated that this is not the case, that the arbitration clause must be looked at independently from the rest of the contract.696

Unfair and Deceptive Acts and Practices: 3.2.7.3.6 Illinois UDAP statute has unique treatment for violation of credit statutes

The Illinois UDAP statute provides that any person who in one year commits three or more violations of certain specified credit statutes, including the Consumer Finance Act, the Consumer Installment Loan Act, the Motor Vehicle Retail Installment Sales Act, the Interest Act, or the wage garnishment and assignment laws, as determined in a civil or criminal proceeding, has engaged in a per se UDAP violation.66 In addition, any person who in a judicial proceeding is found to have willfully and materially violated a state credit statute has committe

Unfair and Deceptive Acts and Practices: 3.2.7.3.7 Massachusetts UDAP regulation finds statutory violations to be per se UDAP violations

Under a Massachusetts regulation it is per se unfair or deceptive to fail to comply with existing statutes, rules, or regulations meant for the protection of the public’s health, safety, or welfare.68 The Massachusetts regulation has survived a challenge based upon constitutional and statutory arguments.69 Consequently, Massachusetts courts have little trouble finding a violation of other law a per se UDAP violation, simply pointing to the attorney general’s regulation.

Repossessions: 7.1 Description of the Problem

Creditors repossessing motor vehicles, boats, manufactured homes, or other collateral may seize items in the collateral, such as the consumer’s cash, documents, tools, or other personal belongings, in which the creditor has no security interest. Although creditors sometimes promptly return this unsecured property, other times the creditor is slow in returning the property, returns the property damaged, or never returns the property.

Repossessions: 7.2 Application of Bailment Law to Unsecured Personal Property

After acquiring unsecured personal property as part of a repossession, the creditor has the duties of a constructive bailee,3 and must exercise reasonable care in the handling of the personal property.4 The level of care that the bailee must exercise depends on how the court categorizes the bailment.5 In the case of personal property repossessed along with collateral, it could be argued that such an acquisition was incidental to the larger lo

Repossessions: 7.3.1 Demanding Return of the Property

After unsecured personal property is seized, consumers should demand the immediate return of the unsecured personalty. Even if the demand seems futile, the consumer should always make a written demand for the personalty as soon as is practicable, itemizing the nature and, if possible, the value of each item.

Repossessions: 10.4.11.1 Generally

Article 9 specifies the required content of the notice.268 The former version of Article 9 explicitly required only that the notice state the time and place of a public sale or the date after which a private sale would occur. Revised Article 9 has preserved this requirement, but has added a number of other requirements. In every case, whether a consumer-goods transaction or not, the notice must include:

Repossessions: 10.4.11.4 Method of Intended Disposition

Revised Article 9 requires that the creditor describe the method of disposition, for both consumer-goods transactions and other transactions.290 Because this requirement is incorporated into UCC § 9-614, which governs consumer-goods transactions, failure to include this information in the notice in a consumer-goods transaction renders the notice insufficient as a matter of law and entitles the consumer to UCC remedies.291 Describing the method of sale as an auction, without indicating whether it

Repossessions: 10.4.11.5 Entitlement to Accounting

Revised Article 9 adds a requirement, applicable both to consumer-goods transactions and other transactions, that the notice state that the debtor is entitled to an accounting of the unpaid indebtedness and the charge, if any, for such an accounting.298 The right to an accounting is set forth in UCC § 9-210(a)(2).

Repossessions: 10.4.11.7 Description of Recipient’s Liability for Deficiency

In consumer-goods transactions, revised Article 9 requires that the notice include “a description of any liability for a deficiency of the person to which the notification is sent.”324 The reference to “the person to which the notification is sent” appears to mean that the notice must be customized so that it states the liability of the particular recipient.

Repossessions: 10.4.11.8 Telephone Number to Learn Redemption Amount

Departing from the former version, revised Article 9 requires the notice of sale in a consumer-goods transaction to refer to the right to redeem the collateral.331 Revised Article 9 only requires that the notice state a telephone number from which the redemption amount is available.332 However, the model form also includes a shorthand description of the redemption right: “You can get the property back at any time before we sell it by paying us the full amount you owe (not just the past due payme

Repossessions: 10.4.11.9 Telephone Number or Address for Additional Information

In consumer-goods transactions, the notice must include a telephone number or address from which the debtor can get additional information about the obligation and the disposition of the collateral.337 Check any telephone number provided to see if it actually is answered, as an incorrect telephone number will make the notice deficient as a matter of law.338 Colorado adopted a slightly different version of this requirement, mandating the provision of both an address and a telephone number rather

Repossessions: 10.4.11.10 Model Form

While the notice need not be in any particular form,340 revised Article 9 provides two “safe harbor” forms of notice: one for consumer-goods transactions341 and a scaled down version for all other transactions.342 These forms include language to meet Article 9’s notice requirements.