Car collateral traps women in debt nightmare

Two women have detailed distressing experiences with title loans, where their vehicles were used as collateral and subsequently repossessed. Heidi Deveau, a business owner from Oakville, took out a $1,000 title loan three years ago, using her Jeep Wrangler. Despite making substantial payments totaling $2,500, she was informed last fall that she owed an additional $4,000 to recover her car. This situation has led to severe financial strain, including facing eviction from her home.

Morgan Hempen, from Digby, Nova Scotia, also secured a $1,000 title loan from the same company, BHM Financial. Her vehicle was repossessed after she changed her bank accounts, leading to missed payments. Hempen reported significant difficulty in contacting the company and was eventually required to pay $5,800 to retrieve her car. As a single mother, she expressed her inability to afford these costs and is seeking a refund.

A spokesperson for BHM Financial defended their actions, stating that repossession is a measure of last resort. They emphasized that this step is taken only after all attempts to communicate with the customer have failed and the account remains in sustained default. The company also noted that additional costs, such as NSF fees, bailiff charges, towing, and storage, can accrue during collection and recovery processes. BHM Financial asserted their openness to discussing payment arrangements to prevent escalation.

Linda Paul, an insolvency trustee, advised that while borrowers can attempt to negotiate with lenders, there's no guarantee of a resolution. She explained that using a vehicle as collateral means surrendering rights to it if the agreement is not met. Deveau is actively pursuing the return of her vehicle and compensation for her losses.