The Justice Department disclosed today that Hyundai Capital America has consented to pay $333,941 to settle allegations of violating the Servicemembers Civil Relief Act (SCRA) through the illegal repossession of 26 vehicles owned by servicemembers.
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division stated, “Members of our Armed Forces should not have to worry about having their cars repossessed while they are in military service.” She emphasized the department's commitment to enforcing laws that protect servicemembers' rights, allowing them to focus on national defense.
U.S. Attorney Martin Estrada for the Central District of California echoed these sentiments, emphasizing the importance of safeguarding servicemembers' rights. He noted that even a simple vehicle repossession can significantly impact a servicemember's peace of mind during deployment.
The SCRA is a federal law offering legal and financial protections for servicemembers and their families. It prevents auto finance or leasing companies from repossessing a servicemember’s vehicle without a court order if at least one payment was made before entering military service.
In a complaint filed in the U.S. District Court for the Central District of California, it was alleged that despite Navy Airman Jessica Johnson notifying Hyundai about her active duty status and providing enlistment orders, her 2014 Hyundai Elantra was repossessed without a court order in July 2017 and sold later that year.
The complaint also claims that between April 15, 2015, and May 21, 2023, Hyundai unlawfully repossessed an additional 25 motor vehicles owned or leased by SCRA-protected servicemembers.
Under the consent order, Hyundai has agreed to compensate each affected servicemember with $10,000 plus any lost equity and make a $74,941 payment to the United States. Additionally, Hyundai will repair credit damages for these servicemembers, provide SCRA training to its employees, and implement policies and procedures that comply with the SCRA.
Hyundai Capital America is a subsidiary of Hyundai Motor America and Kia America and ranks among the top 10 captive auto-finance companies in the United States.
The Civil Rights Division’s Housing and Civil Enforcement Section and the U.S. Attorney’s Office for the Central District of California jointly managed this case. Since 2011, the Justice Department has secured over $481 million in monetary relief for more than 147,000 servicemembers through its enforcement of the SCRA.
Servicemembers who believe their rights under the SCRA have been violated are advised to contact their nearest Armed Forces Legal Assistance Program Office.