New law will help Creditors with Repossession


GPSAre Creditors entitled to use GPS devices to track down collateral?  Under a new statute passed in Wisconsin, certain groups, including Creditors, are entitled to install and use GPS devices to aid in the repossession of collateral.

Wis. Stats. § 940.315, a criminal statute, was signed into law in late, 2015, making it a Class A Misdemeanor to either install, without a person’s consent, a Global Positioning System (GPS) device or to obtain information from a GPS device that is installed on a vehicle that is owned or leased by another person.  The Governor’s decision to pass this law and the Wisconsin Department of Financial Institution’s recent opinion concerning the usage, by Creditors, has finally answered the long-standing question of whether Wisconsin would be a State that would allow a Creditor to use a GPS device to aid in repossession.

Section 940.315, Wis. Stats. generally does not allow anyone to use GPS devices, but the section also provides an exception, which allows certain groups permission to install or obtaining information from a GPS device.  Among the groups that are allowed to install or obtain information from a GPS device are lienholders acting to track the movement or location of a motor vehicle in order to repossess the motor vehicle.

It is important to keep in mind that Wis. Stats. § 940.315 is a criminal statute.  A criminal statute does not provide a Creditor with the right to install a GPS device on a Debtor’s vehicle to aid in repossession.  Instead, the statute provides that an employee working for a lienholder will not be prosecuted for installing, or obtain information from, a GPS on a vehicle.  However, on January 26, 2016, the State of Wisconsin Department of Financial Institutions issued a statement providing that installation of a GPS device upon a vehicle is not illegal.  However, the Department of Financial Institutions provided that the use of this technology must comply with the Wisconsin Consumer Act in addition to any other laws that may govern the usage in a particular situation.

Section 940.315, Wis. Stats. does contain a few rules about how/when a Creditor may use a GPS device:  1) obtaining permission prior to installation of the GPS device and 2) only using the GPS device to aid in repossession.

The language in Wis. Stats. § 940.315(2) does appear to provide lienholders an exemption to obtaining permission prior to installation of (or obtaining information from) a GPS device.  Even still, Creditor agencies like the Wisconsin Automobile & Truck Dealers Association have recommended that a Creditor inform the debtor at the time that the vehicle is purchased that a GPS device is (or may be) installed and obtain permission from the Debtor prior to installing or obtaining information from the device.

Section 940.315(2), Wis. Stats. provides that a lienholder may only make use of the device to aid in repossession of the vehicle.  Thus, a Creditor can only use the device to aid in repossession of the vehicle.  A Creditor should only use a GPS device after a Debtor is in default and the Creditor has done everything necessary to obtain lawfully right to repossess the vehicle.  Lastly, after the Debtor has satisfied the loan, it would be in a Creditor’s best interest to offer to remove the GPS device at no cost to the Debtor.

Using a GPS device to aid in repossession will make the remedy of repossession not just an option for a Creditor, but a guarantee.  This is a powerful tool if it is used correctly.  To avoid potential criminal penalties or violations of the Wisconsin Consumer Act during repossession for using GPS devices, please contact an experienced collections attorney.