Hyundai Motor Co’s auto loan division and affiliate Kia Corp’s auto-finance arm have agreed to settle U.S. charges that they illegally repossessed 862 vehicles of active duty military personnel, the U.S. Department of Justice (DOJ) said on Tuesday.
The settlement by Hyundai Capital America, also known as Hyundai Motor Finance and Kia Motors Finance, requires the companies pay at least $700,000 in compensation to affected service members, the DOJ said.
Under the Servicemembers Civil Relief Act, lenders cannot repossess a motor vehicle from a member of the military in active service without a court order if they made a deposit or one or more payments before entering military service.
In addition to the monetary compensation, the settlement also requires the two companies to remove negative credit reporting related to the unlawful repossessions, and to refrain from collecting on the balances owed by the borrowers with repossessed vehicles.
The companies’ unlawful repossessions occurred between 2011 and 2020, the government said. The claims were resolved without an admission of liability by Hyundai Capital America or Kia Corp’s auto-finance arm.
Hyundai and Kia unit settles U.S. charges it repossessed service members’ vehicles
Hyundai Motor Co’s auto loan division and affiliate Kia Corp’s auto-finance arm have agreed to settle U.S. charges that they illegally repossessed 862 vehicles of active duty military personnel, the U.S. Department of Justice (DOJ) said on Tuesday.
The settlement by Hyundai Capital America, also known as Hyundai Motor Finance and Kia Motors Finance, requires the companies pay at least $700,000 in compensation to affected service members, the DOJ said.
Under the Servicemembers Civil Relief Act, lenders cannot repossess a motor vehicle from a member of the military in active service without a court order if they made a deposit or one or more payments before entering military service.
In addition to the monetary compensation, the settlement also requires the two companies to remove negative credit reporting related to the unlawful repossessions, and to refrain from collecting on the balances owed by the borrowers with repossessed vehicles.
The companies’ unlawful repossessions occurred between 2011 and 2020, the government said. The claims were resolved without an admission of liability by Hyundai Capital America or Kia Corp’s auto-finance arm.
