- Under the Servicemembers Civil Relief Act (SCRA), automobile manufacturers are not allowed to repossess military members’ vehicles without a court order.
- Despite this, 26 military personnel accused Hyundai of repossessing their vehicles.
- Now the automaker has agreed to pay $333,941 to settle the claims and provide SCRA training to its employees.
The North American financial arm of Hyundai, Kia and Genesis, Hyundai Capital America, has agreed to pay $333,941 to resolve allegations that the company violated the Servicemembers Civil Relief Act (SCRA) by selling vehicles from Illegally confiscated 26 military personnel.
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The SCRA prevents finance and leasing companies from repossessing vehicles from members of the armed forces without a prior court order, provided the owner or lessee has made at least one payment before entering military service.
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However, Hyundai Capital America is accused of doing exactly that to 26 people between April 2015 and May 2023, including naval aviator Jessica Johnson, who filed a lawsuit against the automaker in U.S. District Court in California.
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The Justice Department alleges that in June 2015, Johnson faxed her recall orders to Hyundai along with a statement stating that her vehicle could not be repossessed without a court order. Nevertheless, in 2017, her vehicle, a 2014 Elantra, was taken away and sold by the company for $7,400 while she still owed $13,796 on her loan.
“Members of our armed forces should not have to worry about having their cars confiscated while serving in the military,” Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division said in a statement. “The Department of Justice remains committed to enforcing laws that protect the rights of our service members so they can devote their full energy and attention to defending our country.”
As part of the settlement, Hyundai agreed to pay $10,000 to the military members whose vehicles were seized, in addition to the lost equity. It will also restore these people’s credit and provide SCRA training to its employees. Ultimately, the automaker agreed to pay the US government the $74,941.
“We are fully committed to protecting the rights of the military members who do so much to protect our country,” said U.S. Attorney for the Central District of California Martin Estrada. “Something as simple as repossession of a vehicle can have a significant impact on the peace of mind of a soldier deployed in defense of the United States. We will continue to enforce the rights of military members so that they can carry out their duties without worrying about unlawful acts at home.”
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