Questions to Ask About License Plate Recognition Technology
FORT WORTH, Texas — There is quite a bit of information currently circulating about license plate recognition technology and the various companies that are providing this technology and services. As a recovery professional, I am sure many of you are interested in learning factual information that would enable you to make an informed decision as to how, or if, your company can benefit from LPR technology.
Many of these questions were brought to light during the 2010 North American Repossessors Summit, hosted by the American Recovery Association and attended by more than 300 repossession professionals.
While there is a lot of information to sort through about LPR technology and the companies that offer it, the questions below provide a roadmap to making a knowledgeable decision about incorporating LPR technology into your business strategy.
Does the LPR company own its LPR technology and software?
If the LPR company licenses its technology from a third-party provider, they are at risk of the software provider changing the technology or discontinuing upgrades or support. In the last 18 months, at least two LPR manufacturers have closed their doors, ending any support offered to their licensees.
Who owns the LPR company?
Is the LPR company an organization that provides LPR technology services or a forwarding, skip or repossession company trying to use LPR technology to gain market share over their competition? How financially solid is the LPR company? Are they profitable? If the LPR company is not on solid financial footing, your investment is at risk if the LPR company goes under.
Does the LPR company share revenue with its users?
LPR companies should share a portion of its revenue with its camera operators to encourage productivity and forge long-term, mutually beneficial relationships. As the LPR company sells its data to automotive lenders, they should share this earned revenue with the partners who helped to collect the data.
Does the LPR company allow its users access to its historical database?
LPR companies should provide access to the plates they scan thereby allowing them to compile local databases from which to bounce their new orders against. This is one of the greatest benefits of using LPR technology. This access can allow a camera operator, on average, to recover between 35 percent and 65 percent of its new orders at the address provided from its local database of plates without ever running a given address.
Does the LPR company have a national footprint, covering all of the top 200 MMAs?
Lenders are more likely to select a company that provides a national solution rather than one that is limited to only a few markets or regions.
Does the LPR company have the endorsement of the major repossession trade associations?
A LPR company should strive to earn the support and endorsement of the associations that are respected and supported by the repossession professionals that comprise a repossession industry group.
Does the LPR company have an open platform that allows accounts to be received from multiple sources, including national and local lenders, recovery agencies, skip companies and forwarding companies?
If not, the LPR company must convince a lender to assign all accounts to their company. This is highly unlikely as most lenders utilize a multi-vendor strategy to manage their repossession process.
Is the LPR company integrated with repossession software companies?
If these relationships are not in place, the LPR company will be unable to allow the entire network of camera operators to assist in the location of an individual agent's accounts. Also, without access to the largest repossession software companies, the LPR company will have limited ability to sell vehicle locate data on a transaction by transaction basis.
Is the software used by the LPR company designed exclusively for use by the repossession industry or is it repurposed law enforcement software?
The repossession industry is unique and the software that is used by the LPR company should be designed to specifically address these needs.
How large is the LPR company's database of plate scans?
The larger a LPR database is, the greater the chance of successfully finding a vehicle for your client. It is important to provide lenders and agents with tangible vehicle locate data compiled from mobile LPR cameras. Plate images captured from a toll booth, bridge, tunnel or other fixed location rarely lead to the recovery of a vehicle. A total of 99 percent of successful plate scan data is from parked vehicles, not those speeding down a freeway.
Does the LPR company have written contracts with automotive lenders?
If the LPR company does not have contracts with lenders, there is little chance of the camera operating recouping his investment in the technology. This may be a moot point if the LPR company does not provide a revenue share program.
What is the total cost of your LPR camera system? Do you own or lease your system?
You should own, not lease, LPR technology. "Membership" or "initiation" fees only add cost, not value, to recovery professionals. If the LPR company is making a profit from camera sales and not providing data to lenders, it may be an indication of financial stress elsewhere.
Does the LPR company use its technology to provide a beneficial public service?
While the primary purpose of the LPR company may be focused on gathering data for recovery purposes, there is a tremendous amount of public good that this data should be used for as well. Does your LPR company work with national law enforcement or agencies that assist in the efforts to apprehend sexual predators, persons wanted for federal felony warrants, and terrorists or recovering missing and abducted children?