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Repossess Consumer Automobiles? You Could Be At Risk For A Costly Class Action Lawsuit. 

by Adam Cornett, Senior Attorney, ABA Insurance Services

After repossessing a vehicle on a defaulted consumer auto loan, a bank must provide a “pre-sale notice” under the UCC before disposing of the vehicle through a public or private sale. When the vehicle is sold for less than the amount owed, a bank typically files a deficiency collection action against the debtor. If, however, the Bank’s pre-sale notice is defective under the UCC, the bank is risking becoming embroiled in the defense of a class action counterclaim filed by the debtor.

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