The U.S. Department of Justice Department Wednesday sued an Orange County sub-prime auto lender, alleging it violated federal law by repossessing the vehicles of military personnel without obtaining the necessary court orders.
Federal prosecutors launched a probe into the practices of California Auto Finance, which is based in the city of Orange, after U.S. Army Private Andrea Starks submitted a complaint to the Justice Department in November 2016.
According to the lawsuit, filed in Los Angeles federal court, Starks notified the company that she would be entering the military the following month. Despite the advance notice, California Auto Finance repossessed her car without a court order on May 9, 2016, her first day of active training, the government alleges.
At the time of repo, the vehicle was parked at the home of Starks’ grandmother in Cedar Rapids, Iowa. The complaint states that California Auto Finance had no process to determine customers’ military status — such as checking the U.S. Department of Defense’s publicly available database — prior to taking their cars.
“The members of our armed forces should be able to devote their full attention to their duties without having to worry about whether their legal rights will be violated by lenders,” said acting Assistant Attorney General John Gore of the DOJ’s Civil Rights Division. “Repossessing vehicles without required court orders is both wrong and illegal. The Justice Department continues to ensure that we are doing all we can to protect and assist service members, veterans, and their families from unlawful conduct by lenders.”
In addition to monetary damages for affected military personnel, the complaint asks for civil monetary penalties and injunctive relief to prevent future repos that violate the Servicemembers’ Civil Relief Act.
The SCRA protects military members against certain civil proceedings that could affect their legal rights while they are in service. It requires a court to review and approve any vehicle repossession if the service member took out the loan and made a payment before entering military service.
The court may delay the repo or require the lender to refund prior payments to the service member. The court may also appoint an attorney to represent the military member, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the service member.
“We have a solemn duty to protect the rights of the men and women who bravely serve in our nation’s armed forces, said U.S. Attorney Nicola T. Hanna. “By repossessing service members’ automobiles without court orders, California Auto Finance allegedly violated their rights. We respect and honor the sacrifice that service members have made to our country, and we will take whatever action we can to protect their rights.”