CarMax, Inc., the largest used car retailer in the United States, has agreed to pay nearly $500,000 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by repossessing vehicles owned by military personnel without obtaining court orders. The Justice Department announced that CarMax will provide at least $420,000 in damages to affected servicemembers and pay a civil penalty of $79,380 to the federal government.
According to the Department of Justice, CarMax repossessed vehicles from servicemembers without securing required court approval. Some repossessions occurred even after CarMax was notified that owners were on active military duty. Additionally, the company reportedly did not extend SCRA protections to reservists who had received orders for active duty.
The SCRA is designed to protect servicemembers and their families from certain legal and financial obligations while they are serving. Under this law, vehicle finance or leasing companies cannot repossess a vehicle from a servicemember who made at least one payment before entering service unless they first obtain a court order. For reservists, these protections start as soon as they receive orders for military service.
“This case was handled by the U.S. Attorney’s Office for the Eastern District of Virginia and the Civil Rights Division’s Housing and Civil Enforcement Section,” according to the press release.
Since 2011, more than $484 million has been secured in monetary relief for over 149,000 servicemembers through enforcement of the SCRA by the Department of Justice. More information about these efforts can be found at www.servicemembers.gov.
Servicemembers or their dependents who believe their rights under SCRA have been violated are encouraged to contact their nearest Armed Forces Legal Assistance Program Office. Locations are available at legalassistance.law.af.mil.
The Justice Department clarified that “the civil claims settled are allegations only; there has been no determination of civil liability.”
