Few notice the “spotter car” from Manny Sousa’s repo company as it scours Massachusetts parking lots, looking for vehicles whose owners have defaulted on their loans. Sousa’s unmarked car is part of a technological revolution that goes well beyond the repossession business, transforming any industry that wants to check on the whereabouts of ordinary people.
An automated reader attached to the spotter car takes a picture of every license plate it passes and sends it to a company in Texas that already has more than 1.8 billion plate scans from vehicles across the country.
These scans mean big money for Sousa — typically $200 to $400 every time the spotter finds a vehicle that’s stolen or in default — so he runs his spotter around the clock, typically adding 8,000 plate scans to the database in Texas each day.
“Honestly, we’ve found random apartment complexes and shopping plazas that are sweet spots” where the company can impound multiple vehicles, explains Sousa, the president of New England Associates Inc. in Bridgewater.
But the most significant impact of Sousa’s business is far bigger than locating cars whose owners have defaulted on loans: It is the growing database of snapshots showing where Americans were at specific times, information that everyone from private detectives to insurers are willing to pay for.
While public debate about the license reading technology has centered on how police should use it, business has eagerly adopted the $10,000 to $17,000 scanners with remarkably few limits.
At least 10 repossession companies in Massachusetts say they mount the scanners on spotter cars or tow trucks, and Digital Recognition Network of Fort Worth, Texas, claims to collect plate scans of 40 percent of all US vehicles annually.
Today, a legislative committee in Boston is scheduled to hold a hearing on a bill that would ban most uses of license plate readers, including the vehicle repossession business, making exceptions only for law enforcement, toll collection, and parking regulation.
“We have technology rapidly moving ahead in terms of its ability to gather information about people,” said state Representative Jonathan Hecht, a Watertown Democrat who filed the bill along with state Senator Cynthia Creem of Newton, Brookline and Wellesley. “We need to have a conversation about how to balance legitimate uses of this technology with protecting people’s legitimate expectation of privacy.”
But Digital Recognition and other so-called “data brokers” who collect plate scans are fighting Hecht and Creem’s bill, arguing that repo agents are not invading privacy when they scan a license plate, which is available for all to see. The data brokers do not disclose the owner of the plates, they point out, though customers such as banks, insurers, and private investigators have ready access to that information.
Brian Shockley — vice president of marketing at Vigilant, corporate parent of Digital Recognition — plans to warn legislators that Massachusetts risks getting left behind in the use of a new tool that helps fight crime.
“I fear that the proposed legislation would essentially create a safe haven in the Commonwealth for certain types of criminals, it would reduce the safety of our officers, and it could ultimately result in lives lost,” Shockley is scheduled to say in testimony prepared for the hearing before the Joint Transportation Committee.
License plate scanning technology has been around for decades — the British police originally adopted it in the 1970s to track the Irish Republican Army members — but it only came into wide use in the last decade as cheaper but highly effective models became available. These scanners use high-speed cameras and optical character recognition technology to capture up to 1,800 plates per minute, even at high rates of speed and in difficult driving conditions. The scanner also records the date, time, and GPS location of each scan.
Since 2008, more than 60 Massachusetts police departments have started using scanners to track down drivers with unpaid tickets, no insurance, or driving stolen vehicles, but the trend has raised concern about potential privacy invasions. In December, Boston police suspended their use of plate scanners altogether after a Globe investigation reported questionable data management, including the accidental public release of more than 69,000 license plate numbers that had been scanned over six months.
Meanwhile, private companies were quietly and rapidly finding ways to profit from much larger databases with little public discussion. Digital Recognition Network, with the help of about 400 repossession companies across the United States, has increased the number of license scans in its database tenfold since September 2010, and the firm continues to add another 70 million scans per month, according to company disclosures. Digital Recognition’s top rival, Illinois-based MVTRAC, has not disclosed the size of its database, but claimed in a 2012 Wall Street Journal interview to have scans of “a large majority” of vehicles registered in the United States.
Unlike law enforcement agencies, which often have policies to purge their computers of license records after a certain period of time, the data brokers are under no such obligation, meaning their databases grow and gain value over time as a way to track individuals’ movements and whereabouts.
Massachusetts private investigator Jay Groob said he uses the license plate database kept by a third data broker, TLOxp, paying $25 for a comprehensive report from the Florida-based company’s “very impressive” database of a billion-plus scans.
“It helps generate other leads,” said Groob, president of American Investigative Services in Brookline. “If a vehicle has been missing, or you need to locate a person, this gives us another locus to investigate.”
Groob said he would use the database to track a missing person or conduct background investigations for child custody or marital infidelity litigation. Groob said he “absolutely” foresees vehicle location data becoming part of private investigators’ standard toolkit.
Chris Metaxas, chief executive of Digital Recognition, has promoted his database as a useful tool for anyone else who has to confirm a person’s real address “because most of the time people are near where their cars are.” He told the Globe that his database is already helping the auto insurance industry cut down on fraud in which where applicants falsely claim to live in a place where insurance rates are lower.
“Some people have a condo in Florida but actually live in New York ten months out of year,” said Metaxas. “Insurers need help to keep this kind of fraud under control.”
But the main commercial use of license plate scanners remains the auto finance and auto repossession industries, two professions that work closely together to track down people who default on their loans. Digital Recognition lists Bank of America Corp., JPMorgan Chase & Co., HSBC Holdings, and Citibank among its clients, while MVTRAC boasts that it serves 70 percent of the auto finance industry.
Liran Cohen — owner of Massachusetts Recovery Bureau, a repossession company in Lynn — said most banks he works with now require repossession contractors to use license plate readers because it is so much easier to find vehicles eligible for repossession.
“The banks want it,” said Cohen, who mounted his license scanner on an unmarked tow truck. “All of them make a big deal out of it, since it gives them so much value.”
But the use of scanners has grown so fast that there has been little discussion of what limits, if any, to place on repossession agents as they trawl for vehicles to impound. A number of such companies contacted by the Globe confirmed that they often send their spotter cars to commercial lots, such as shopping mall parking lots, because those tend to be hotspots for vehicles to repossess.
In fact, on its website Digital Recognition described what it calls good “target environments” for repossession agents, including “malls, movie theaters, sporting events, and numerous other locations.” In marketing materials, the firm has indicated that it suggests routes for repossession companies that focus on workplaces and commercial lots during the day and apartment complexes and residential areas at night.
However, several commercial property owners contacted by the Globe said they had no idea repossession agents could be in their parking lots, scanning license plates and feeding them into a national database. Some said they would consider the practice trespassing.
“We’re unaware that this is happening, and we’re reaching out to our security teams and law enforcement contacts to get a better handle on it,” said Les Morris, spokesman for Simon Property Group, which owns Copley Place mall in Boston and South Shore Plaza in Braintree.
“If we saw scanning like this being done, we would throw them out,” said Issie Shait, senior vice president of property management at New England Development, which owns the CambridgeSide Galleria and Bunker Hill Mall District.
Two repossession companies also told BetaBoston that they focus on low-income housing developments, since a significant number of residents are delinquent on their car payments.
“This is just another example of stereotyping,” responded Cambridge Housing Authority deputy executive director Michael Johnston, who had never heard of plate scanners before. “But our lots are open, and we don’t have any gated communities in our system, so I don’t know how to prevent it.”
But the national database companies claim they have no say in where their affiliates scan plates, whether on private property or along public streets. They said repossession agents and tow truck companies are all private contractors who make their own decisions.
“We have nothing to do with the actual data collection process,” Digital Recognition’s Metaxas said in an interview. “We provide technology to repossession professionals.”
The burgeoning private databases of license plates may ultimately be a boon to law, as well, giving them access to a trove of license plates that many are not allowed to keep themselves, because of data-purging requirements. Hecht and Creem’s bill would require law enforcement statewide to purge its license plate data after 48 hours.
Digital Recognition already provides its entire data pool to more than 3,000 law enforcement agencies nationwide, free of charge for most searches. The Massachusetts State Police is a registered subscriber, as are the Boston, Cambridge, Somerville, Brookline, and Quincy police departments. Even Boston College and Brandeis police have access to the firm’s entire scan database.
License plate reader companies have defeated proposals similar to the one before the Legislature’s Joint Transportation Committee, and they sued the state of Utah after it enacted a ban on commercial use of license plate scanning. In its filing, Digital Recognitionasserts that its field agents have a First Amendment right to collect pictures of license plates in public places.
But privacy advocates say the databases are far more intrusive than the data brokers admit, arguing that private businesses can easily translate anonymous-sounding license plate numbers into owners’ names just by obtaining information from states’ motor vehicle registries. In Massachusetts, for example, private investigators can get access to the Registry of Motor Vehicles directly, and insurance companies and banks may already know the plate number for a given individual.
“Right now, it’s the wild West in terms of how companies can collect, process, and sell this kind of data,” says Kade Crockford of the American Civil Liberties Union of Massachusetts. “The best legal minds, best public policy thinkers, and ordinary people whose lives are affected need to sit down and think of meaningful ways we can regulate it.”
Shawn Musgrave is the editor of MuckRock, an independent investigative news and open records startup based in the Boston Globe Media Lab. Shawn can be reached at email@example.com.