Car finance lenders fitting kill switches to disable vehicles if customers miss a payment

Car finance lenders fitting kill switches to disable vehicles if customers miss a payment

Finance lenders in the UK are now fitting 'kill switch' devices that can remotely disable customers' cars if they miss a repayment on their vehicle.

Car finance firms in the UK are fitting controversial kill switches that can remotely disable customers’ vehicles if they miss payments.

Lenders are now offering the option of finance deals to motorists with poor credit ratings, with the kill switches fitted as part of the deal to ensure drivers pay up on time.

These devices work as part of a black box system installed when the car is bought, with motorists sent a code to enter into the device each month that they successfully make a payment.

The box will make a beeping noise when payments are due, however if no payment is made then no code is received and the vehicle is disabled.

Often labelled as ‘black box finance’ loans by lenders, it’s claimed by some credit brokers to cut payment default rates by up to 500 per cent, however critics are concerned about the ethics of the technology and also potential safety issues.

Andrew Leakey of Stephensons Solictors, told the Daily Mail that under the Consumer Credit Act customers negatively affected could argue that they had fallen victim to an “unfair relationship”.

He said: “They shouldn’t have the power to stop the car there and then. That is before you get into data-protection issues with the box recording your movements and safety issues if a customer is stranded alone.”

Motorists are able to access emergency codes in the event that their vehicles are disabled, but can only use it until they’ve moved the vehicle to a secure location.

A spokesperson for the Finance and Leasing Association, the leading trade body for the UK consumer credit, said that such devices were used only by a minority of credit brokers and only in “limited circumstances”.

They added: "A customer must always be made aware that their vehicle has been fitted with one of these devices - and the circumstances in which it could be used must comply with FCA regulations."

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