America’s Largest Used Car Dealer, CarMax, Agrees to Pay Nearly $500K for Illegally Repossessing Vehicles From US Troops
The largest used car dealer in the country, CarMax, has agreed to pay close to $500,000 to resolve claims that it unlawfully repossessed U.S. military personnel’s cars. Each impacted military member will receive $15,000 in addition to any lost car equity, according to the U.S. Department of Justice.
CarMax will pay a minimum of $420,000 in damages to “at least 28 service members” as part of the settlement. It is also liable for a $79,380 civil penalty.
“Federal law prohibits businesses from repossessing service members’ vehicles without a court order,” said Assistant Attorney General Harmeet K. 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 charges made by the DOJ against CarMax
The Department of Justice claims that CarMax repossessed several vehicles even after the owners informed CarMax that they were in military service. The DOJ also alleges that CarMax repossessed service member vehicles without obtaining court orders as required by federal law. Additionally, it is alleged that CarMax neglected to provide reservists who had been ordered to report for active duty with SCRA [Servicemembers Civil Relief Act] protections.
As long as the service member makes at least one payment on the vehicle before to enlisting in the military, the SCRA law prohibits an auto finance or leasing firm from taking back a service member’s vehicle without first getting a court order.
Additional remedies CarMax must follow
As a result of the ruling, CarMax will update its policies and procedures to guarantee that it safeguards the rights of U.S. service members going forward. Additionally, it must provide the Justice Department with revised SCRA policies, including how it will utilize the Defense Department database to confirm military status.
Under the four-year deal with the DOJ, CarMax must also ask credit bureaus to remove negative notations associated with the repossessions, contact impacted service members within 30 days, and offer free communication channels.
