On March 28, the United States Department of Justice (“DOJ”) announced that it has filed a lawsuit in the United States District Court for the Central District of California against an Orange County subprime auto lender for allegedly repossessing servicemembers’ cars without appropriate court orders, in violation of the Servicemembers Civil Relief Act, 50 U.S.C. § 3901 et seq. (“SCRA”).
The DOJ began investigating the lender after a United States Army Private submitted a complaint in November 2016 regarding the defendant’s repossession of her vehicle while she was on active duty, despite the fact that the servicemember had notified the lender of her military status. Under the SCRA, if an individual takes out a loan prior to entering military service, a lender cannot repossess that person’s vehicle once he or she is on active duty without a court order approving the vehicle repossession.
The DOJ’s complaint against the lender alleges that it had no processes in place to determine customers’ military status, such as checking the Department of Defense’s publicly available database, prior to repossessing their cars. The DOJ seeks monetary damages for affected servicemembers, as well as civil monetary penalties and injunctive relief to prevent future repossessions that violate the SCRA.