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Justice Department Obtains $5.4 Million in Relief to Compensate Service Members for Unlawful Repossessions
Arcadia Weekly Nov 16, 2017
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The Justice Department announced today that it has obtained an additional $5.4 million for service members whose vehicles were unlawfully repossessed by Wells Fargo Bank, N.A. in violation of the service members Civil Relief Act (SCRA). The bank, which does business under the name Wells Fargo Dealer Services, has agreed to pay this money to approximately 450 service members under a 2016 settlement that resolved the department’s SCRA lawsuit against the company. This additional amount brings the total compensation under the settlement to more than $10.1 million and the total number of service members eligible for relief to more than 860.
On Sept. 29, 2016, the department filed a complaint in United States v. Wells Fargo Bank N.A., d/b/a Wells Fargo Dealer Services in United States District Court in Los Angeles, alleging that Wells Fargo repossessed 413 vehicles of SCRA-protected service members without court orders between Jan. 1, 2008 and July 1, 2015. On the same day, the department agreed to a settlement that required Wells Fargo to pay $10,000 to each of the affected service members, plus any lost equity in the vehicle with interest. Wells Fargo was also required to pay a $60,000 civil penalty to the United States and repair the credit of all affected service members. At the time of the settlement, the department announced that 413 service members were eligible to receive compensation.
Since entering into the settlement with the department in September 2016, Wells Fargo has identified additional violations affecting approximately 450 service members that occurred during the period covered by the settlement. Wells Fargo has begun to provide over $5.4 million in compensation to these additional service members under the agreement. Together with the compensation previously announced by the department in September 2016, a total of more than 860 service members and their co-borrowers are eligible to receive $10,183,950.
“Just a few days ago, we observed Veterans Day to honor those who have served our country so bravely,” said Acting Assistant Attorney General John M. Gore. “The Justice Department will continue to honor their service throughout the year by vigorously enforcing service members’ rights under federal law. The men and women of our armed forces should be able to devote their full attention to their military duties, without having to worry about their cars being repossessed back home. We are pleased that our settlement agreement has ensured that hundreds of additional service members will be compensated for the damages they suffered as a result of illegal auto repossessions.”
“The SCRA provides important protections and is intended to prevent unnecessary financial hardship for the brave women and men who serve in our armed forces,” said Acting United States Attorney Sandra R. Brown. “Losing an automobile through an unlawful repossession while serving our country is a problem service members should not have to confront. We are pleased that Wells Fargo is taking action to compensate these additional service members as required under the settlement with the Justice Department. My Office is committed to protecting the rights of service members on all fronts.”
The SCRA requires a court to review and approve any repossession if the service member took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the service member, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the service member. By failing to obtain court orders before repossessing motor vehicles owned by protected service members, Wells Fargo prevented service members from obtaining a court’s review of whether their repossessions should be delayed or adjusted to account for their military service.
For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov. Service members and their dependents who believe that their rights under SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office.
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