Santander Consumer USA Settles Lawsuit, 9.35M For Military Member Repossessions

Santander Consumer USA, one of the nation’s largest auto lenders, has settled a lawsuit for what has proved to be unlawful repossessions. According to reports, Santander illegally repossessed 1,100 vehicles belonging to active duty military members. Those repossessions will now cost the organization $9.35 million dollars. The settlement was reached with the U.S. Department of Justice, and according to the New York Times, is the largest sum ever collected by the U.S. for car repossessions.

The money was collected because active service military members are protected under the Service Members’ Civil Relief Act. This law protects service men and women who often have to drop everything to go serve the country. A court order is required to repossess vehicles owned by active duty service members. This type of order wasn’t in place for the 1,100 repossessions, thus Santander Consumer has to dish out a settlement and help those military members rebuilt their damaged credit. Each service member will receive $5,000 from Santander Consumer as part of the settlement.

Stuart Delery, the acting associate attorney general for the Justice Department said this action would benefit those military members who suffered because of the illegal repossessions. In a NYT interview, Delery said, “This is a just resolution that will provide service members with financial relief and help repair their bad credit caused by Santander’s improper repossessions and fee collections with respect to more than 1,100 cars.”

According to a Department of Justice press release, acting service members have a lot of their plate and their rights should be honored. Acting Assistant Attorney General of the Civil Rights Division of the DOJ Vanita Gupta said, “Those who answer this nation’s call to duty understandably have much on their minds while they are in military service. Whether their car will be seized and sold at auction should not be an additional worry.”

The question is, how could Santander Consumer make this mistake? Certainly going after service member vehicles would result in at the very lease a public relations nightmare. What do they have to say about it? According to a New York Times report, Laurie Kight, a spokeswoman for Santander Consumer responded to the case with a few insights. Kight reportedly said that Santander “strengthened controls in 2012 to prevent improper repossessions.” She also pointed out that most of the repossessions in question occurred before 2012 and that about one-third of the repossessions were for loans which originated at other institutions and were sold to Santander Consumer.