Recovery Pro Uncovers Fraud Using Advantage GPS
He’s on the front lines of vehicle repossession, skip tracing, identity theft, and to an extent — thwarting organized crimes.
James Waldron, CEO of 1st Adjusters, Inc., says there is an ever-growing organized effort to defraud automotive retailers and a host of simultaneous challenges for recovery industry professionals.
Waldron has been in the collateral recovery industry for more than 25 years, having started in New York State before moving to Texas, where he started his own company. Today, his company is a professional full-service collateral recovery company headquartered in Austin, Texas, with nine offices in Austin, Dallas, San Antonio, Houston, Del Rio / Eagle Pass, and Corpus Christi.
He relates a recent success story that exemplifies the challenges dealers, finance companies, and recovery agents face in an environment with an ever-more sophisticated criminal element.
1st Adjusters was contracted to repossess a high-end, late-model Mercedes Benz. Given the vehicle’s value and other considerations, Waldron, a licensed private investigator, took on the recovery himself.
“Fortunately, the vehicle had been equipped with an Advantage GPS unit and we were able to get a good location,” Waldron said.
This vehicle was sold through a dealership, financed by a third-party lender, and rushed at the customer’s insistence. Many “bells and whistles” were added, including an extended service contract. The first-payment default resulted in the repossession order.
“Because of the Advantage’s GPS data, we were able to locate the vehicle efficiently,” he said. “That’s a real plus for us when it comes to being profitable.”
Increased insurance rates, difficulty securing insurance, higher recovery equipment costs, difficulty hiring and keeping quality employees, and rising diesel prices have left many with no other option than to exit the business, Waldron said. Today, fewer businesses are handling more repos, even though repos generally have declined during and after the Covid-19 pandemic.
“GPS limits the number of addresses we have to check,” Waldron said. “The quicker and easier we can secure the collateral, the fewer expenses we incur. Regardless of how much our expenses are, we’re only paid what was agreed on upfront. If we don’t secure the unit, we don’t get paid.”
In this case, not only was Waldron able to locate the Mercedes, he saw something suspicious. The apartment lot where he found the vehicle also had other late-model vehicles, each had temporary plates. These included three Mercedes, a BMW, and a Jaguar. Turns out all the vehicles were purchased fraudulently.
“What was very concerning to me was that inside the one vehicle I recovered was a folder loaded with stolen IDs, credit cards, and other personal information,” he said. “Think about a large binder, the kind you might use to collect and secure a baseball card collection. In the one binder, I found 167 real IDs. The other vehicles had the same type of binders in them as well. I never got into those.”
Waldron was shocked when he phoned the dealership that sold one of the cars financed by a third-party finance company. After finding a manager, he was told, “Oh, that vehicle was fully funded. We don’t know anything else.”
As disheartening as that was for Waldron, contacting the county sheriff may have been worse.
“He got on the case relatively quickly but told me that his department was understaffed and did not have the resources to investigate what was obviously organized fraud activity,” Waldron said. “The IDs included a federal ID, and I called authorities. The Feds were at my door in 37 minutes. That gave me some hope.”
Part of what makes 1st Adjusters successful, Waldron noted, is that his company is willing to do “door knocks.” His employees take the time to try to make contact with the car buyer or at least with whoever answers the door. Many lenders do not want to do door knocks, as they typically cost more and may lead to an altercation.
“We’re paid when we locate and recover the vehicle for our client,” he said. “We do what we know works.”
A longtime member of the American Recovery Association, Waldron said the work the association has done to raise awareness of the challenges facing recovery professionals, as well as legislative and regulatory advocacy, has been tremendously helpful to agents across the country.
Waldron noted that dealers must take an active role in preventing fraud and what amounts to vehicle theft.
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