In South Carolina, the Fair Debt Collection Practices Act governs lending and collection practices of automobile loan lenders. When car buyers sign loans to purchase their vehicles, their lenders have certain legal duties. The South Carolina Department of Consumer Affairs administers the South Carolina Consumer Protection Code. The Consumer Protection Code was enacted in 1974 and protects consumers from unlawful lending and deceptive trade practices.
Default Notice
When consumers default on their vehicle loans, their lenders must provide them with a written default notice and give them at least one 20-day opportunity to pay their debt before they can demand a return of their vehicles or reclaim it through an involuntary repossession. Lenders must also comply with the Fair Debt Collection Practices Act when attempting to collect their debts.
Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act prohibits predatory conduct intended to mislead or harass consumers. Under the South Carolina consumer protection law, a lender or a third-party collection agency may not contact the consumer if he defaults on his loan during unreasonable hours. Generally, it is illegal for lenders to contact consumers before 8 a.m. or after 9 p.m. Furthermore, lenders may not contact consumers if issued a request to stop contact from the consumers. With the exception of attorneys represented to hire the borrowers, collection agencies and banks cannot call any other parties in an effort to collect their debts.
Consumer Rights
After the debt collector or financing agency contacts a borrower who has defaulted on her loan, it must send her a written notice within five days after contact notifying her of the amount due and what she may do to contest the default. Lenders cannot garnish a borrower's wages in South Carolina. Garnishment is limited to child support orders, government debts and garnishment orders entered in other states. However, lenders have repossession rights and may remove vehicles from driveways or streets if they do so peacefully.
Spot Credit
Spot credit loans are legal in South Carolina, but the lender must comply with the same consumer protection law when issuing spot credit loans. A spot credit loan allows the consumer to immediately take possession of the vehicle before a lender actually approves her application. After he takes possession, the lender can immediately require him to return the car if it denies his loan. The lender can conduct a credit check following possession, and according to the South Carolina Department of Consumer Affairs, often consumers were not aware their loans were contingent upon a pending credit check.
Considerations
Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your state.
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