(NEWSER) – T. Candice Smith lost control of her car on the Las Vegas freeway when it suddenly shut off. She alleges it happened because the lender of her subprime auto loan activated a starter-interrupt device installed in the car as a condition of the loan. The New York Times reports that the devices, also outfitted with GPS, are used in a quarter of these loans nationwide and allow lenders to remotely disable a car's ignition if payments are late. (Smith's lender says the devices can't shut down a car while it's in operation, and it reached a confidential settlement with her.)
"No middle-class person would ever be hounded for being a day late. But for poor people, there is a debt collector right there in the car with them," says one expert. High-interest subprime loans, intended for people with bad credit scores, have in five years ballooned to 25% of all car loans.
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