The American financing division of Hyundai and Kia has agreed to pay $334,941 to resolve allegations that it unlawfully repossessed vehicles that belonged to active military personnel, the U.S. Department of Justice announced on May 8.
According to documents submitted to a federal court in Los Angeles, Hyundai Capital America allegedly violated the Servicemembers Civil Relief Act between 2015 and 2023 by seizing 26 cars whose owners had started making loan payments before reporting for active service.
The Justice Department stated that the financing arm had a legal obligation to obtain approval from a judge before repossessing vehicles.
For instance, In 2017, the finance division repossessed and auctioned Navy Airman Jessica Johnson’s three-year-old Hyundai Elantra after concluding that Johnson was on active duty but “not deployed.”
Court documents reveal that Hyundai Capital America learned in 2020 that it shouldn’t have repossessed the vehicle, even though Johnson still owed $13,796 on it.
Assistant Attorney General Kristen Clarke stated, “While serving in the military, car repossession should not be a concern for our Armed Forces members.”
Hyundai Capital America will reimburse each of the 26 military members for $10,000 plus any lost car equity while refusing to acknowledge any wrongdoing and restoring their credit. The U.S. Treasury will also receive $74,941 from it “to vindicate the public interest.”
In recent years, the Justice Department has resolved allegations against several finance corporations, such as the financing arms of General Motors, Nissan, and Wells Fargo, under the servicemembers law.
