GM Financial has agreed to pay over $3.5 million to resolve allegations that it violated the Servicemembers Civil Relief Act by illegally repossessing 71 servicemembers’ vehicles and by improperly denying or mishandling over 1,000 vehicle lease termination requests, the Justice Department announced Wednesday.
“Members of our Armed Forces should not have to suffer financial hardship as a result of their service to our nation,” said assistant attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Civil Rights Division remains steadfast in its commitment to enforcing laws that safeguard the rights of our servicemembers so that they can devote their energy and attention to the defense of our country.
“The last thing servicemembers should be worried about while deployed is paying off vehicle leases they don’t want and can’t use,” said U.S. Attorney Chad E. Meacham for the Northern District of Texas. “As members of our armed forces put their lives on the line for our country, we are determined to protect their rights here at home.”
The Justice Department began investigating GM Financial after receiving a complaint about a potential violation involving U.S. Army Chief Warrant Officer 3 Thomas Gorgeny, according to a release. In September 2017, CW3 Gorgeny received orders to deploy overseas for 10 months and requested that GM Financial allow him to terminate his vehicle lease early pursuant to the SCRA.
The department alleges that, since 2015, GM Financial has improperly denied servicemembers’ lease termination requests, charged servicemembers improper early termination fees or lease amounts after the date of termination, and failed to provide servicemembers timely refunds of lease amounts they paid in advance. The department alleges that GM Financial’s failure to properly handle servicemembers’ lease termination requests resulted in over 1,000 SCRA violations.
GM Financial agreed to pay $3,534,171 to the affected servicemembers and a $65,480 civil penalty to the United States. GM Financial will pay at least $10,000 to each of the 71 servicemembers who had their vehicles unlawfully repossessed, according to a release. For the servicemembers who were charged an improper fee when they terminated their vehicle leases, GM Financial will refund the fee and will pay additional damages of three times the fee or $500, whichever is greater.
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