Hyundai, Kia Settle Military Repossession Suit

By Staff Writer May 16, 2024

The Justice Department said that Hyundai Capital America has agreed to pay $333,941 to resolve allegations that it violated the Servicemembers Civil Relief Act by illegally repossessing 26 vehicles owned by members of the military. 

“Members of our Armed Forces should not have to worry about having their cars repossessed while they are in military service,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department remains steadfast in its commitment to enforcing laws that safeguard the rights of our servicemembers so that they can devote their full energy and attention to the defense of our country.”

The SCRA is a federal law that provides legal and financial protections for servicemembers and their families. The law prevents an auto finance or leasing company from repossessing a servicemember’s vehicle without first obtaining a court order, as long as the servicemember made at least one payment on the vehicle before entering military service.

In a complaint filed in the U.S. District Court for the Central District of California, the department alleges that in June 2015, Navy Airman Jessica Johnson faxed Hyundai her enlistment orders with a statement that her vehicle could not be repossessed without a court order while she was on active duty service. On July 27, 2017, she told a Hyundai customer service agent that she was still in the military. Nevertheless, on or about July 30, 2017, Hyundai repossessed her 2014 Hyundai Elantra without a court order. In October 2017, Hyundai sold the car for $7,400. At the time, Navy Airman Johnson still owed $13,796 on the auto loan.

The complaint also alleges that between April 15, 2015, and May 21, 2023, Hyundai unlawfully repossessed 25 additional motor vehicles owned or leased by SCRA-protected servicemembers.

Under the consent order, Hyundai has agreed to pay $10,000 plus any lost equity to each servicemember whose vehicle was repossessed and a $74,941 payment to the United States. The consent order also requires Hyundai to repair the servicemembers’ credit, provide SCRA training to its employees and implement policies and procedures that comply with the SCRA.

Hyundai Capital America is a wholly owned subsidiary of Hyundai Motor America and Kia America and one of the top 10 captive auto-finance companies in the United States, providing indirect vehicle financing for retail and lease customers of Hyundai, Genesis and Kia dealerships nationwide.

Rate this item
(0 votes)
Last modified on Thursday, 23 May 2024 11:20