CANAL FULTON, Ohio -

An Ohio repossession agency wanted to inform the rest of the industry about what it’s calling a scam gaining traction in the financial community.

Source One Adjusters of Ohio explained the dangers of what’s being dubbed a “private repossession,” a process that agency officials say targets a bankrupt consumer using free Internet classified ads. Source One believes these companies will arrange for a repo and then hold the collateral until the lien holder sends cash to get the vehicle back.

The Ohio agency went into more detail about this process.

“Your bankrupt debtor responds to an ad that reads, ‘Repossess your own car for cash,’ or ‘Ask us about cash for keys,’” Source One explained.

“For a nominal fee, the debtor releases the vehicle to the company by executing an authorization to recover property and bailment agreement,” Source One continued. “The company, now in possession of the collateral, keeps the vehicle until the lien holder comes looking for it. At such time that it is revealed that the surrendered (and defaulted) collateral is in possession of this third party, the lien holder pays a fee for services rendered to take back possession of their collateral.”

The Ohio agency contends it has witnessed these fees come in anywhere from $1,200 to $1,600.

“Services rendered, according to the agreement, include transportation and storage of the vehicle and administrative costs,” officials added.

Source One acknowledges that it is not a legal expert. “However, in our opinion this borders on conversion and extortion of the lending community,” agency officials contend.

“We at Source One have used every resource available  to inform our clients and lenders alike of this scam because we believe consumers, lenders and legitimate repossession agencies are all a victim,” they went on to allege.

Source One offered an additional update about “private repossessions,” sharing how one vehicle finance company tried to curtail this process.

“Upon learning the details of the company operation, the lender refused payment and demanded their collateral be surrendered,” Source One recollected.

“The company, unable to extort payment from this lender, moved the vehicle out of state to attempt to flip title for resale. This industrious lender, however, was able to obtain an emergency replevin to secure the vehicle,” the Ohio agency claimed.

“In the end, the due diligence and resources of the lender finally led to the successful recovery of this particular vehicle — still at a price,” Source One concluded.