Hyundai’s U.S. Financing Arm Settles Illegal Vehicle Repossession Case Involving Military Service Members

The Justice Department cites SCRA violation and requires court permission before vehicle repossession.

The U.S. Department of Justice recently announced that Hyundai Capital America, the financing arm of Hyundai and Kia in the United States, has agreed to pay $334,941 to settle charges of illegally repossessing vehicles belonging to military service members.

This violation of the Servicemembers Civil Relief Act occurred between 2015 and 2023, during which Hyundai Capital America repossessed 26 vehicles from owners who had begun paying off their loans before going on active duty.

One such example cited in court documents was the repossession and sale of Navy Airman Jessica Johnson’s Hyundai Elantra in 2017.

Hyundai Capital America settles the case, paying $334,941 for illegally repossessing vehicles from soldiers. (Hyundai)

Despite Johnson still owing $13,796 on the vehicle, Hyundai Capital America proceeded with the repossession, only realizing its error in 2020. The law requires financing arms to obtain court permission before repossessing vehicles from service members.

As part of the settlement, Hyundai Capital America will pay $10,000 plus lost vehicle equity to each of the 26 affected service members, along with repairing their credit.

Additionally, they will pay $74,941 to the U.S. Treasury. While not admitting wrongdoing, Hyundai Capital America expressed its commitment to supporting military families and enhancing compliance with all SCRA requirements.

This settlement underscores the importance of adhering to laws that protect service members during their active duty.

The Justice Department has previously settled similar claims against other financing companies, emphasizing the need for all financial institutions to understand and comply with laws that safeguard the rights of military personnel.