- Under the Servicemembers Civil Relief Act (SCRA), automakers aren’t allowed to repossess the vehicles of people serving in the armed forces without a court order.
- Despite that, 26 servicemembers accused Hyundai of taking back their vehicles.
- Now, the automaker has agreed to pay $333,941 to settle the claims, and will provide its employees with SCRA training.
Hyundai, Kia and Genesis North American finance arm, Hyundai Capital America, has agreed to pay $333,941 to settle allegations that it violated the Sevicemembers Civil Relief Act (SCRA) by illegally repossessing vehicles owned by 26 members of the military.
The SCRA prevents finance and leasing companies from taking back vehicles belonging to people in the armed forces without first obtaining a court order, as long as 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 just that to 26 people between April 2015 and May 2023, including Navy Airman Jessica Johnson, who filed a complaint against the automaker in U.S. District Court in California.
The Justice Department alleges that in June 2015, Johnson faxed her enlistment orders to Hyundai along with a statement noting that her vehicle couldn’t be repossessed without a court order. Despite that, in 2017 her vehicle, a 2014 Elantra, was taken from her 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 repossessed while they are in military service,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division in a statement. “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.”
As part of the settlement, Hyundai has agreed to pay $10,000, in addition to any lost equity, to the military members whose vehicles it repossessed. It will also repair those people’s credit, and provide its employees with SCRA training. Finally, the automaker has agreed to pay the $74,941 to the U.S. government.
“We are fully committed to protecting the rights of servicemembers, who give so much to protecting our country,” said U.S. Attorney Martin Estrada for the Central District of California. “Something as simple as a vehicle repossession can have a significant impact on a servicemember’s peace of mind as he or she deploys in defense of the United States. We will continue to enforce the rights of servicemembers so that they can perform their duties without having to worry about unlawful actions at home.”
