CarMax, Inc., the largest used car retailer in the United States, has agreed to pay nearly $500,000 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by repossessing vehicles owned by military personnel without obtaining required court orders. The settlement includes at least $420,000 in damages for affected servicemembers and a civil penalty of $79,380 payable to the U.S. government.
According to the Justice Department, CarMax allegedly repossessed vehicles from servicemembers without securing court approval as mandated by federal law. In some cases, repossessions occurred even after owners informed CarMax of their military status. The company also reportedly did not provide SCRA protections to reservists who had received orders for active duty.
The SCRA is designed to protect servicemembers and their families by preventing auto finance or leasing companies from repossessing vehicles without a court order if at least one payment was made before entering military service. For reservists, these protections begin when they receive orders for active duty.
The case was managed by the U.S. Attorney’s Office for the Eastern District of Virginia and the Civil Rights Division’s Housing and Civil Enforcement Section. Since 2011, enforcement of the SCRA has resulted in over $484 million in relief for more than 149,000 servicemembers nationwide.
As part of the settlement, CarMax will revise its policies and procedures to better safeguard servicemember rights in future transactions.
“Servicemembers and their dependents who believe that their rights under the SCRA may have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations can be found at legalassistance.law.af.mil,” according to information provided by authorities.
The Justice Department provides further details about its SCRA enforcement efforts on its website at www.servicemembers.gov.
Officials noted that “the civil claims settled are allegations only; there has been no determination of civil liability.”
