Kill Switches For High-Risk Loan Customers

kill switchDriving a car off a lot usually comes with a sense of exhilaration or freedom, but that thrill is short-lived when you’ve got a debt collector riding shotgun wherever you go.

That’s basically the case for a whole host of Americans with bad credit — in use since the 90s, the New York Times reports that now some 2 million cars in the United States are outfitted with remote kill switches that shut cars down if their owners fall behind on payments.

The system is simple enough: once installed, the so-called starter interrupt will sit in place and beep to notify drivers that their payments are coming up. Once delinquent drivers tiptoe past a certain threshold (which seems to vary by lender and state), some account manager somewhere hits a button and voilà — that motor won’t purr until someone pays.

As with most things that involve money and trust, there are a few ways to look at the situation. Lenders get to offer more loans (and collect way more interest — think twice monthly payments at 20 percent interest) while regular folk get to drive to work and pick their kids up from school. Sounds almost like a win-win… until you realize that beyond the sky-high rates, people’s whereabouts are constantly monitored — some dealers have even installed GPS trackers without telling their customers — and there’s been at least once instance where a car was remotely disabled while someone was actually driving it.


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