By SDCN Staff
WASHINGTON–The Justice Department announced that it has reached a settlement with CarMax Incorporated, the nation’s largest retailer of used cars, to resolve allegations that CarMax violated the Servicemembers Civil Relief Act by illegally repossessing motor vehicles owned by members of the military.
As part of the settlement, CarMax will pay at least $420,000 in damages to servicemembers and a civil penalty of $79,380 to the United States.
“Federal law prohibits businesses from repossessing service members’ vehicles without a court order,” said Assistant Attorney General Harmeet Dhillon of the Justice Department’s Civil Rights Division. “The Department of Justice is proud to defend the rights of those who serve in our military and will continue to vigorously enforce the laws that protect them.”
The department alleges that CarMax repossessed servicemember vehicles without obtaining court orders as required by federal law, as well as repossessed some vehicles even after owners told CarMax that they were in military service. CarMax also allegedly failed to extend Servicemembers Civil Relief Act protections to reservists who had received orders to report for active duty. In addition to paying a civil penalty and compensation to harmed individuals, CarMax will revise its policies and procedures to ensure that the rights of U.S. servicemembers are protected in the future.
The Servicemembers Civil Relief Act is a federal law that provides legal and financial protections for servicemembers and their families. The law prevents an auto finance or leasing company from repossessing a servicemember’s vehicle without first obtaining a court order, as long as the servicemember made at least one payment on the vehicle before entering military service. For members of a reserve component, the protections begin on the date the member receives orders to military service.
This case was handled by the Civil Rights Division’s Housing and Civil Enforcement Section and the U.S. Attorney’s Office for the Eastern District of Virginia. Since 2011, the Department has obtained over $484 million in monetary relief for over 149,000 servicemembers through its enforcement of the Servicemembers Civil Relief Act.
CarMax to pay $500K over illegal servicemember repossessions of vehicles
