Post From :Last Week, This Morning®
On September 29, the Department of Justice announced that it entered into a settlement agreement with a vehicle finance company to resolve allegations that it failed to obtain the requisite court order before repossessing the vehicles of five active-duty servicemembers, in violation of the Servicemembers Civil Relief Act. Under the SCRA, a finance or leasing company may not repossess a vehicle on which it holds a lien from an active-duty servicemember unless it obtains a court order and the servicemember has made at least one payment on the financing contract before entering military service. In addition to alleging that the finance company failed to obtain a court order, the DOJ also alleged that the finance company took no steps to determine whether the vehicles’ owners were active-duty servicemembers before repossessing their vehicles and, in some cases, allegedly went through with the repossession after being told that the owner of the vehicle was on active duty.
Under the terms of the settlement, the finance company will pay $60,000 in compensation to affected servicemembers, forgive any unpaid balance on their accounts, and take steps to repair damage to their credit. The finance company is also required to provide the DOJ with a list of all its repossessions between August 2023 and the effective date of the settlement agreement, and the DOJ will run that list through the Department of Defense Manpower Data Center database and undertake any independent investigations it deems appropriate to identify additional repossessions that violated the SCRA. Finally, the finance company is required to pay a $60,000 civil penalty, make changes to its policies and procedures for vehicle repossessions to avoid future violations of the SCRA, and provide training to employees who are involved in SCRA compliance or repossession activities.
Amicus Brief(ly): The DOJ has consistently been tough on companies that it perceives to have violated servicemembers’ rights, as evidenced by the Servicemembers and Veterans Initiative highlighted on its website. Pursuant to that initiative, the DOJ has pursued claims against finance companies, towing companies, storage facilities, and others related to claims under the SCRA. This settlement is relatively minor, but the pursuit of it in the first place underscores the importance of servicemembers and veterans in the eyes of the DOJ. And this settlement was avoidable because this is not new law – any company involved in vehicle repossessions should have an SCRA scrub in its processes to help avoid taking servicemembers’ cars without a court order. |
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