Over $300K owed to servicemember’s illegally repo’d car

Hyundai Capital America, one America’s top 10 captive auto-finance companies, has agreed to pay $333,941 for violating the Servicemembers Civil Relief Act (SCRA). The Justice Department filed a complaint in U.S. District Court for the Central District of California alleging that the company unlawfully repossessed 26 motor vehicles that were owned or leased by servicemembers who were protected under the SCRA. The penalties include a $74,941 fine to the United States and a $10,000 payment plus any lost equity to each servicemember whose vehicle was repossessed. 

In June 2015, Navy Airman Jessica Johnson faxed Hyundai her enlistment orders, which she was due to report to active duty in August. She requested SCRA benefits, specifically requesting that her vehicle not be repossessed while she was on active duty. While she was deployed, her account became delinquent.

In July 2017, she spoke to a Hyandai customer service representative when she returned from deployment, telling them she was still active duty, but no longer deployed. A Hyundai employee recommended that her car be repossessed, since she was no longer deployed even though she was still on active duty. Under the SCRA, Hyundai should have gotten a court order to repossess the car, but they didn’t.  Her car was repossessed. Johnson still owed almost $14,000. Her vehicle was sold for $7,400. 

The SCRA offers financial and legal protections to servicemembers, to allow them to focus on serving their country. This law prevents repossessing a servicemember’s vehicle without a court order, whether buying to own or under a lease, provided the member makes at least one payment on the contract before entering the service. The Justice Department determined that at least 25 other cars had been illegally repossessed by Hyundai. Hyundai opted to resolve the complaint through a consent decree settlement. In addition to monetary penalties, Hyundai will also repair each servicemember’s credit and will train employees about SCRA to ensure compliance. 

It’s lesson to businesses that have contracts with the brave men and women who choose to serve their country. Make sure your business understands the SCRA. The government offers official information about the Justice Department’s enforcement of the SCRA at www.servicemembers.gov.