Finance Companies Pay for Service member Repos Featured
09 October 2017
The Justice Department announced that Westlake Services LLC and its subsidiary, Wilshire Consumer Capital LLC, have agreed to pay $760,788 to resolve allegations that the companies violated the Service Members Civil Relief Act (SCRA) by repossessing 70 vehicles owned by SCRA-protected service members without first obtaining the required court orders. Both companies target junior enlisted service members for their loans and products. During its investigation, the department found that Westlake and Wilshire had failed to adopt policies and procedures necessary to ensure that their motor vehicle repossessions complied with the SCRA. The agreement requires Westlake and Wilshire to provide $10,000 in compensation to each of the 70 affected service members, plus any lost equity in the vehicle with interest. Westlake and Wilshire also must repair the credit of all affected service members, pay a $60,788 civil penalty to the United States and determine, in the future, whether any vehicle it is planning to repossess is owned by an SCRA-protected service member. If so, Westlake and Wilshire will not repossess the vehicle without first obtaining a court order or valid waiver of SCRA rights. The agreement also contains provisions ensuring that all eligible service members will receive the benefit of the SCRA’s six percent interest rate cap on their auto loans. The agreement resolves the DOJ’s claims and the complaint will be dismissed once Westlake and Wilshire deposit the funds required by the settlement agreement into an escrow account and pay the civil penalty to the United States. Westlake and Wilshire will contact service members to be compensated through this settlement in the upcoming months. They will locate victims and distribute payments at no cost to service members.This matter came to the department’s attention in 2016, when the Consumer Financial Protection Bureau’s Office of Service Member Affairs notified the department that it had received a complaint that Westlake and Wilshire were conducting motor vehicle repossessions in violation of the SCRA.