The Servicemembers Civil Relief Act (SCRA) is a significant piece of legislation designed to protect active-duty military members from unfair financial and legal practices, including vehicle repossession. Despite these legal protections, some service members still face challenges when dealing with lenders and repossession agencies. Fortunately, the Department of Justice (DOJ) has consistently enforced SCRA provisions and reached favorable settlements for affected military members.
What Is the SCRA and How Does It Protect Against Vehicle Repossession?
The SCRA provides various legal and financial protections for active-duty service members, including safeguards against vehicle repossession. Under the SCRA, lenders cannot repossess a car without a court order if the loan was obtained before the service member entered active duty. This protection ensures that military members are not unfairly penalized for financial difficulties that arise due to their service commitments.
To legally repossess a vehicle, lenders must prove to a court that they followed SCRA regulations, including verifying whether the borrower is on active duty and obtaining the requisite court approval. Even in cases where the loan was obtained after enlistment, lenders must still comply with strict rules to ensure fairness.
DOJ Settlement Examples in Vehicle Repossession Cases
Over the years, the DOJ has stepped in to enforce SCRA protections and secure settlements for military personnel whose rights were violated. Here are a few notable examples of cases where the DOJ successfully intervened on behalf of service members:
1. Hyundai Capital America Case
In 2021, Hyundai Capital America was required to pay over $360,000 in damages after the DOJ determined it had illegally repossessed vehicles from service members without court orders. The company had failed to fully comply with SCRA requirements, and as a result, active-duty members were wrongfully deprived of their vehicles. The settlement offered compensation for affected individuals and reinforced the importance of SCRA compliance.
2. Westlake Services LLC Settlement
Westlake Services LLC and its subsidiary, Wilshire Consumer Credit, also faced legal action in a 2022 SCRA violation case. The DOJ found that Westlake had illegally repossessed vehicles from service members in at least 70 cases. The company ultimately agreed to compensate victims and implement new policies to prevent future violations.
3. Santander Consumer USA Agreement
The DOJ announced an agreement with Santander Consumer USA in a 2019 case involving the wrongful repossession of over 1,000 vehicles. Santander paid $9.35 million in settlements, highlighting the severity of the violations and the significant financial impact wrongful repossessions can have on military families.
These cases underscore how seriously the DOJ takes SCRA violations and the importance of lenders adhering to the law when dealing with service members.
How Does the SCRA Benefit Military Members?
SCRA protections against vehicle repossession are just one example of how the law is designed to safeguard military members' financial well-being. These protections serve several key purposes:
1. Preventing Financial Hardship
Active-duty service often requires service members to relocate frequently and manage deployments, making it difficult to keep up with financial obligations. By limiting lenders’ ability to repossess vehicles unfairly, the SCRA reduces the risk of financial hardship during periods of active duty.
2. Ensuring Fair Treatment by Lenders
The SCRA holds lenders accountable and requires them to act fairly when dealing with service members. This ensures that military personnel are not taken advantage of during their service to the nation.
3. Providing a Legal Avenue for Justice
When lenders violate SCRA protections, service members have a legal framework for recourse. DOJ settlements often include compensation for affected individuals, reinforcing the protections that the law is designed to provide.
4. Protecting Career Mobility
Losing a vehicle due to illegal repossession can disrupt a service member’s career and transportation needs. SCRA protections help safeguard against these disruptions, allowing them to fulfill their military duties without unnecessary stress.
What Should You Do If You Face Vehicle Repossession While on Active Duty?
If you are a service member facing vehicle repossession, taking immediate steps to protect your rights is essential. Here’s what to do:
1. Verify SCRA Coverage
Confirm whether your loan originated before or after entering active duty. If it was before, the repossession is almost certainly subject to SCRA protections.
2. Contact the Lender
Inform your lender of your active-duty status and remind them of their obligations under the SCRA.
3. Consult Legal Counsel
Contact an SCRA attorney to evaluate your situation and determine whether your rights have been violated.
4. Report to the DOJ
If you believe your lender has acted unlawfully, you can file a complaint with the DOJ's Service members and Veterans Initiative, which investigates SCRA violations.
Aggressive and Experienced Military Attorneys
If you or a loved one is facing an unlawful vehicle repossession while on active duty, you may have legal options under the SCRA. Military Justice Attorneys is dedicated to protecting the rights of service members and holding lenders accountable. Our experienced team can help you navigate SCRA protections and pursue the compensation and relief you deserve. Call (843) 773-5501 today for a free consultation.