The 'algorithm' at work
When my client was sued by one of the largest auto finance companies in existence
In previous posts, I have discussed negotiating a settlement with a mega-creditor. In that scenario, you are not dealing with the average person or business. Those businesses have their own weird way of doing things.
In a conversation I once had with opposing counsel regarding this, he referred to his client not as a person but “an algorithm.” This real-life example is why he chose this phrase:
My client is being sued by one of the largest auto finance companies in existence. The plaintiff in this case will be very well-prepared for trial. It is an original creditor, so it will have good documentation and a witness that can testify based on personal knowledge of the loan. Of course, my client can’t deny buying the car or making payments to the auto finance company, which means that the plaintiff has about a 95% (if not higher) likelihood of winning at trial. So the only thing to really do is try to negotiate a settlement that my client can actually honor.
The amount being claimed in the case is $14,772.97. So my client made an opening, lowball, lump-sum offer to settle the case. The finance company counteroffered and said that it would accept $12,011.50.
Recommended Read: “How and when could your vehicle be repossessed? ~ And how to get it back once debt buyers get ahold of it”
My question is, “Why that particular figure?” Why not round it up to $12,000? Or $12,500? Or $12,100? What’s up with the $11.50? I asked opposing counsel about it, and he admitted, “I have no idea how they come up with these numbers.”
So if you are ever trying to negotiate a settlement with a mega-creditor and it seems like you are talking to a machine or a space alien, you have a 50/50 chance of being right.
Are you interested in reading more Defense by Davis posts like this one? Subscribe to my Substack account today! Check out Foundations of Construction Law too. For immediate needs, click here to contact me directly.