So-called “Walkaway Loans” are Wrong, Not Prevalent
Last week The Wall Street Journal published a story on a scam it called “kicking the trade,” which some American Financial Services Association members are aware of as a “walkaway loan” or “stove piping.” Our colleagues at the National Auto Dealers Association, as well as some of our members, have engaged with Journal reporters on background, on the record, and in prepared statements for what appears to a series of articles on the topic of vehicle sales and finance. Each of the stories has presented almost purely anecdotal evidence, and the reporters rarely if ever provide readers with our industries’ full statements or context on the matters.
Both AFSA and NADA are discussing next steps to address this ongoing Journal series. It’s also important to clear the air on these so-called walkaway loans.
There is no credible data that this practice is systemic or prevalent in the marketplace. In the places where it does occur, however, it is deceptive, predatory, and abusive to consumers. NADA put it succinctly in their statement, which AFSA echoes: “Engaging in misrepresentations is reprehensible and should not occur at auto dealerships or any other type of business. It is also expressly prohibited by federal and state law.”
February 20th, 2020 by Dan Bucherer