Auto finance company scopes GPS tracking

16.08.2010
In a development that is sure to alarm privacy advocates, a major auto finance company is quietly scoping the legality of using GPS tracking devices in vehicles it finances.

Maine's Bureau of Consumer Credit Protection recently received a query from a financing company outside the state asking whether such a move would violate state consumer credit laws, bureau superintendent William Lund said on Monday.

Lund did not disclose the name of the company. But he described it is a national firm that is probably making the same inquires in other states as well.

The intention behind using GPS devices apparently is to determine if a particular car loan contract represents a good credit risk for someone planning to buy the loan in the secondary finance market, Lund said. A secondary loan purchaser is someone who purchases a loan or set of loans from the primary lender.

A lawyer for the finance company said the GPS devices will be used to analyze the car purchaser's driving patterns to determine if it matches a baseline of expected behavior, Lund said.

"The consumer's application, would establish a 'baseline' of expected behavior, and the [risk] rating assigned to the contract would be determined by how closely the GPS tracking revealed that the consumer was fitting the pattern established by the application," Lund said.