Privacy group wants better regulation for GPS starter interrupt devices
'Things have to change or we're really going to be a surveillance society'
They are small devices, but they can wield a lot of power.
GPS starter interrupt devices seem to have flown under the radar in Canada and the president of one privacy group says they need to be regulated.
No one knows how many of the devices are in vehicles in Canada, but some auto finance companies are requiring people with bad credit to pay for them, and have them installed, as a condition of receiving a car loan.
The device can track a vehicle and sound an alarm when the car is started if a payment is late. It can even remotely disable the vehicle if the owner is in serious arrears.
One company that sells them, Imetrik, says on its website the devices go a long way toward "maximizing cash flow and encouraging on-time payments."
But privacy advocates say there's another side to the story.
Not a level playing field
"Starter interrupters are just one of a wide range of technologies that have come on the scene in recent years that companies use for their own benefit and often to the detriment of consumers," said Sharon Polsky, president of the Privacy and Access Council of Canada.
She said there are good reasons why businesses want to use them and it's "not exactly a level playing field very often."
"I need something. I find a merchant who will provide it. They see I have bad credit and they impose whatever terms they want and what option do I have but to accept their terms?" she said.
CAA also has concerns
It's a concern echoed by Gary Howard, a spokesperson for the Canadian Automobile Association.
"Even though you might agree to it, it doesn't seem like it should even be on the table to begin with," he said.
"I'm assuming these agencies have many, many ways to collect payment on vehicles. This seems beyond what I would consider reasonable."
Howard also has safety concerns. He wants to know what happens if the vehicle is disabled and there's an emergency.
"When you think about safety and security and allowing people to act in a secure way, this seems rather intrusive," he said.
George Iny, with the Automobile Protection Association, said while the device can reduce potential conflicts between a repo man and the car owner, it is important for companies to follow the rules of repossession, which vary from province to province.
"If you're going to repossess you have to follow repossession rules, he said. "Electronic repossession is repossession."
Iny said a related concern is with monitoring and regulating subprime lending — loans to people with bad credit.
He said the contracts are often a nightmare with people paying "twice the normal retail price, high interest rates, and all kinds of other fees that anyone else would not pay, dramatically increasing the cost to the borrower."
He said this technology allows lenders to "soak you for what you're good for, and then what your friends and family might be good for to lend you the money, and then finally [they] take the vehicle back."
He said some lenders put vehicles in the hands of people who will never make the payments.
"They get just enough upfront money, they overprice the vehicle and it's actually profitable for them to sell the same car two or three times," he said.
Iny also said the APA believes people are being charged too much for installing the device, making them a further source of profit for dealers.
Laws not keeping up with technology
Both Howard and Polsky said the issues around starter interrupters need to be addressed sooner rather than later, but it seems governments have been slow to react.
"Canada doesn't have much in the way of consumer protection legislation," Polsky said, adding most privacy laws were written in the 1980s and 1990s.
"They're now pretty much obsolete," she said. "The laws have not kept up with new technology and it's a very wide grey area, so companies really are at liberty to do pretty much whatever they want."
Tobi Cohen, a spokesperson for the Office of the Privacy Commissioner of Canada, said in an email: "We have not specifically looked at the collection and use of GPS tracking information by car dealerships for the purposes of disabling a vehicle for non-payment."
2015 study touched on starter interrupters
Cohen said the office funded a study by the B.C. Freedom and Information and Privacy Association in 2015.
It briefly addresses starter interrupters, saying the devices are controversial in the U.S., with "reports of cars being disabled while idling at stoplights and one report of a car being shut down while driving."
CBC News contacted several companies that sell starter interrupters. Only one responded.
PassTime said in an email it has been operating in Canada for 10 years and has sold an estimated 100,000 devices. It says they cost between $150 and $250 each.
Spokesperson Jeff Karg said when properly installed, their device "will not affect a vehicle while in motion."
Devices have consumer advantages
Karg said while PassTime devices are designed to help finance companies lower the risk of offering financing to subprime borrowers, they may also allow consumers to qualify for financing that would otherwise not be available to them.
"[It can] improve communication between consumers and finance companies and help promote positive payment behaviour," he said, adding "the goal of our program is to help more consumers qualify for financing to purchase vehicles and help them stay in those vehicles."
On its website, PassTime, points out another benefit.
"No humiliation or reputational damage, no breach of the peace, no towing to an impound lot, no costly towing and storage charges to pay and no damage to ... credit rating for the repossession."
It urges best practices such as ensuring the consumer receives full written disclosure that the device is on the vehicle and how it works.
It also says customers should be told what, if anything, to do if their car is immobilized and they need it for an emergency.
'1984 wasn't meant as a recipe'
It states customers should not be charged for the cost of the device and its installation.
Polsky said laws around starter interruption devices have to be updated.
"Things have to change or we're really going to be a surveillance society," she said. "You know, 1984 wasn't meant as a recipe of how to do it. It was a warning."