Newspaper article International New York Times

Lender Reaches Deal over Car Repossessions ; Santander Unit Set to Pay $9.35 Million for Seizures from Active- Duty Troops

Newspaper article International New York Times

Lender Reaches Deal over Car Repossessions ; Santander Unit Set to Pay $9.35 Million for Seizures from Active- Duty Troops

Article excerpt

The lender, federal prosecutors said, illegally seized cars from members of the armed forces, some deployed thousands of miles away.

Santander Consumer USA has reached a $9.35 million settlement with the Justice Department over accusations that the company, an auto lender, illegally seized cars from members of the military.

The deal, which still requires the approval of a federal judge, involves the largest sum ever collected by the United States for the illegal repossession of cars, and is another setback for the giant auto lender.

Under federal law, lenders like Santander Consumer USA, a Dallas- based unit of the Spanish bank, must get a court order before repossessing vehicles owned by active-duty service members.

The law, called the Servicemembers Civil Relief Act, recognizes that military members have to upend their lives, often at a moment's notice, sometimes leaving their finances in peril. By requiring lenders to first obtain a court order, the law provides service members with a chance to delay or contest repossessions.

But Santander Consumer, prosecutors said, failed to get those court orders, leaving service members, including some who were deployed thousands of miles away, to fight at home and abroad. Prosecutors said that the lender's repossessions stretched over roughly five years, from January 2008 until February 2013. Santander Consumer, prosecutors said, completed 760 repossessions against service members protected under the relief act.

The case, filed in Federal District Court in Dallas, also accused Santander Consumer of going after an additional 352 service members for fees that stemmed from illegal repossessions started by other lenders.

John R. Parker, the acting United States attorney for the Northern District of Texas, said on Wednesday that the settlement would help "prevent such improper repossessions in the future."

The case traces to a complaint lodged with the Army Legal Assistance Program. Army Specialist Joshua Davis told lawyers that Santander illegally repossessed his car in the middle of the night while he was at basic training.

"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," said Stuart Delery, the Justice Department's acting associate attorney general. …

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