But John C. Chapman, undersecretary of the state’s Consumer Affairs and Business Regulation division, said the technology poses a “potential public safety concern.” Chapman said the state may consider introducing legislation that would regulate the use of starter interruption devices. “[We want to] continue our efforts to ensure consumers are bring treated fairly, especially in the subprime auto market,” he said.

Companies that cater to high-risk borrowers say the so-called payment assurance devices — typically installed under a dashboard — give them a way to quickly recover cars from delinquent borrowers, using the technology to modernize work otherwise carried out by repo men.

Auto financing companies increasingly are using electronic devices to remotely shut down vehicles in Massachusetts and other states when an owner falls behind on loan payments, raising concerns about the safety, privacy, and fairness of the practice.


The devices usually work like this: Borrowers who are in arrears on payments might suddenly find their car is inoperable when they try to start it. After they make a payment, their auto loan servicer provides them with a code that allows the vehicle to be started.

Bloomberg News reported that the Federal Trade Commission is investigating the use of electronic devices and tracking systems used by at least two auto loan companies, citing potential abuse. The FTC said it doesn’t comment on such matters.

Consumer advocacy groups, including the National Consumer Law Center in Boston, also have questioned whether the devices violate consumers’ privacy. Some loan companies tap into a car’s preinstalled GPS system to determine the vehicle’s whereabouts.

Financing companies say the ability to shut down a vehicle remotely gives them more latitude to write loans for people with poor credit. But it’s also leading to more repossessions.

The Federal Reserve Bank of New York said consumer auto debt hit a record $1.16 trillion nationwide in the last quarter of 2016. And last month, 0.29 percent of auto loans originated by finance companies were 90 to 120 days delinquent, almost double the February 2011 percentage, according to Moody’s Analytics data. The delinquency rate for a borrower with a credit score between 580 and 619 — considered to be in the subprime range — was significantly higher, at 0.42 percent, fueling concern about a bubble in the market for subprime auto loans


The increase also has been accompanied by horror stories about cars that have been deactivated without notice, leaving their drivers high and dry. The New York Times reported on a woman who needed to get her asthmatic daughter to the emergency room but had to pay a $389 bill before she could start her car. In testimony before the Nevada Legislature, another woman said her car — which had been outfitted with a remote shut-off device — stopped running while she was driving on a Las Vegas freeway, nearly causing her to crash.

“Ideally, we’d like to see them not used,” Jon Van Alst, an attorney at the National Consumer Law Center in Boston, said of the shut-off devices. “And a lot of states don’t have statutes that address this one way or the other.”

A recent investigation of subprime auto loan firms in Massachusetts by examiners with the state Office of Consumer Affairs and Business Regulation found that some dealerships were either tracking cars via GPS or using shut-off devices. Chris Goetcheus, a spokesman for the agency, did not cite any loan companies by name. Even though use of the devices is currently unregulated, Goetcheus said, buyers should at least be informed — in writing — when they are installed in a vehicle.


The agency is now considering whether to file legislation that would require “very visible disclosure” at dealerships and other sales locations.

“It’s a common practice, a growing practice and a huge privacy concern,” Goetcheus said. “They need to disclose it.”

Megan Woolhouse can be reached at megan.woolhouse@globe.com. Follow her on Twitter @megwoolhouse.