Two women who took out “title loans” from a financial company and used their vehicles as collateral had their cars repossessed over missing payments and were charged thousands of dollars to get them back.
Three years ago, during tough financial times, Heidi Deveau, a small business owner from Oakville, took out a title loan for $1,000 from BHM Financial using her paid-off Jeep Wrangler as collateral.
“I can’t even remembered why we needed the money at the time,” Deveau said in an interview with CTV News.
“It’s extremely frustrating. I’ve already paid $2,500 on a $1,000 loan.”
She said monthly payments were $83 per month for 24 months. And while there were some missed payments, she said she always got the loan back in good standing.
Last fall Deveau thought it was paid in full, until she was notified that she was behind on her payments and would need to pay $4,000 to get it back.
“I need my vehicle for work,” said Deveau, who also told CTV News that she’s facing eviction from her home “because of this whole nightmare.”
Morgan Hempen, of Digby, Nova Scotia, also took out a $1,000 title loan with the same company, using her vehicle as collateral.
“It was very upsetting and I wasn’t able to reach anyone and they wouldn’t answer my phone calls,” Hempen told CTV News.
She said her vehicle was repossessed over missed payments when she changed her bank accounts. Hempen said she had to pay the company $5,800 to get her car back.
“I’m really looking for my money back. I’m a single mom and I really can’t afford (this),” she said.
Repossession a ‘measure of last resort’: lender
In a statement, a spokesperson on behalf of BHM Financial, said “repossession is considered only as a measure of last resort after all reasonable efforts to engage with the customer have been exhausted and an account remains in sustained default without a satisfactory resolution.”
“Where customers are unresponsive or actively avoid communication despite repeated attempts to engage, we are required to proceed with appropriate collection actions in accordance with our contractual rights and applicable law,” they said.
“It is also important to note that in situations where an account falls into serious default, there may be additional costs associated with collection and recovery efforts.”
BHM Financial said additional costs can include non-sufficient funds (NSF) fees, bank charges, bailiff fees, towing, storage, and transportation expenses.
“We remain open to discussing payment arrangements in order to help prevent escalation to collection actions, including repossession, particularly where a customer is experiencing temporary financial hardship,” the company said.
“Our objective is always to avoid such outcomes by maintaining communication and reaching mutually workable arrangements.”
Linda Paul, a licenced insolvency trustee with MNP Ltd., said loan holders can try to work with lenders, however, there is a chance the lender won’t be willing to work with them.
“You’re essentially giving up your rights to the vehicle to the lender and saying if I don’t make right on this agreement then you have the right to seize it,” said Paul.
Deveau, meanwhile, said she’s still fighting to get her Jeep back.
“I want my vehicle returned and I want compensation,” she said.
