CHICAGO (Legal Newsline) — HSBC Finance Corporation, successor to HSBC Auto Finance Inc., will pay $434,500 after allegations of violating the Servicemembers Civil Relief Act (SCRA), the Justice Department has announced.
HSBC purportedly violated the act when it repossessed more than 75 cars owned by protected servicemembers without obtaining necessary court orders.
“HSBC repossessed cars without taking into account their owners’ ongoing service to our country,” said principal deputy associate attorney general Bill Baer. “This settlement rights this wrong, compensates the affected servicemembers and honors our commitment to making sure military members are treated fairly at all times.”
The settlement covers alleged events from between 2008 and 2010. The Justice Department said that during these years, HSBC conducted repossessions without court orders even when its own records noted that the borrower could be a service member. As per the settlement agreement, each servicemember will receive $5,500 from HSBC.
“Servicemembers should never have to worry that they will lose their cars while they answer our nation’s call to duty,” said principal deputy assistant attorney general Vanita Gupta, head of the Justice Department’s Civil Rights Division. “HSBC should have heeded these concerns before repossessing vehicles. I commend the company for working cooperatively to reach an appropriate resolution once the department raised the issue.”