Citifinancial agreed to pay $907,000 to resolve allegations that it violated federal law by repossessing 164 cars owned by military service members without first getting the required court orders, federal officials announced Monday.
During the investigation, the Department of Justice learned that CitiFinancial repossessed cars without court orders even when CitiFinancial had evidence in its own records suggesting that a borrower could be a protected servicemember, officials stated.
In several cases, loan servicing notes indicated that CitiFinancial was informed that the borrower was in military service or had received orders to report for military service.
CitiFinancial, nevertheless, continued repossession efforts and eventually succeeded in repossessing the servicemembers’ vehicles, according to authorities.
“Members of our armed forces make extraordinary sacrifices in order to protect and defend our nation, and they should be able to serve actively without fear that their legal rights will be violated,” said Associate Attorney General Rachel L. Brand.
“The men and women who serve in the armed forces deserve to have us protect their backs while they selflessly protect us,” said U.S. Attorney John Parker. “This conduct clearly fell short of that and I’m grateful we were able to repair some of that harm.”
This settlement resolves a suit filed by the department in the Texas and covers vehicle repossessions that occurred between 2007 and 2010.
CitiFinancial Auto Corporation originated and serviced these auto loans until 2010, when operations and assets were sold to Santander Consumer USA, Inc.
In February 2015, the Department entered a settlement with Santander that provides servicemembers with more than $10.5 million in compensation for repossessions that violated federal law.
As part of the investigation of Santander’s repossession practices, the Department learned that CitiFinancial sold Santander the right to collect debts owed by servicemembers after their cars had been repossessed by CitiFinancial.
This agreement further compensates servicemembers for their losses by requiring CitiFinancial to pay $5,000 to each impacted servicemember, in addition to the Santander settlement.
CitiFinancial must also pay $10,000 to one affected servicemember who did not receive partial compensation through the Santander settlement.
In addition, CitiFinancial will pay $500 per account to compensate borrowers for any lost equity, with interest, and must take steps to repair the credit of all affected servicemembers.
An independent settlement administrator will contact servicemembers in the coming months to finalize individual settlements at no cost to the servicemembers.Warning: file_get_contents(): https:// wrapper is disabled in the server configuration by allow_url_fopen=0 in /hermes/bosnacweb02/bosnacweb02af/b360/ipg.sbnotebookcom/wp-content/themes/goodnews5/framework/functions/posts_share.php on line 151 Warning: file_get_contents(https://plusone.google.com/_/+1/fastbutton?url=http%3A%2F%2Fwww.cjnotebook.com%2Fcitifinancial-pays-907000-for-illegally-repossessing-servicemembers-cars%2F): failed to open stream: no suitable wrapper could be found in /hermes/bosnacweb02/bosnacweb02af/b360/ipg.sbnotebookcom/wp-content/themes/goodnews5/framework/functions/posts_share.php on line 151