Santander Consumer USA, SCRA Violations, Texas 2013

A motor vehicle lender has agreed to pay at least $9.35 million to resolve a lawsuit alleging that it violated the Servicemembers Civil Relief Act (SCRA), the Justice Department announced today.

Santander Consumer USA Inc. was accused of improperly repossessing over 1,100 cars between January 2008 and February 2013. The proposed consent order represents the largest settlement for illegal automobile repossessions ever obtained by the United States under the SCRA.

The settlement covers the improper repossessions of 1,112 motor vehicles. The agreement requires Santander to pay $10,000 plus compensation for any lost equity (with interest) to each of the 760 service members who had their cars repossessed without court orders.

The lawsuit also alleges that Santander sought to collect fees arising from an additional 352 repossessions that unrelated motor vehicle lenders had conducted in violation of the SCRA before Santander acquired the loans. The agreement requires Santander to pay $5,000 to each of these service members.

Santander must also repair the credit of all affected service members.

The settlement requires Santander to check the Defense Department’s automated database to see if a car’s owner is in military service prior to conducting a repossession.

The Department of Justice first learned of Santander’s repossession practices through a referral from the U.S. Army’s Legal Assistance Program.

This is not the first time Santander has been accused of SCRA violations. In 2013, the company agreed to pay $4 million to settle a lawsuit alleging that it improperly repossessed cars from service members.

Source: https://www.justice.gov/archives/opa/pr/justice-department-reaches-settlement-santander-consumer-usa-resolve-allegations-concerning