Justice Department Secures Settlement with Santander Consumer USA Inc.

Department of Justice

WASHINGTON, D.C. — The Department of Justice announced Thursday that Santander Consumer USA Inc, dba Chrysler Capital (Santander), has agreed to pay more than $134,000 to settle a federal lawsuit alleging that the company denied early motor vehicle lease terminations to servicemembers who qualified for them under the Servicemembers Civil Relief Act (SCRA). The department previously settled an SCRA lawsuit against Santander in 2015 for repossessing the vehicles of 1,112 servicemembers without a court order.

“The civil rights of servicemembers who sacrifice so much for our country must be respected,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “We are committed to ensuring that those serving in our nation’s military receive the full range of benefits and protections that they are entitled to under the Servicemembers Civil Relief Act.”

“Given all our veterans put on the line when they deploy or change station, the last thing they should have to worry about is their car lease,” said Acting U.S. Attorney Prerak Shah for the Northern District of Texas. “The Servicemembers Civil Relief Act is designed to ease the financial burdens associated with active duty military service. We are determined to uphold this important law.”

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The SCRA permits servicemembers to terminate their motor vehicle leases early without penalty after entering military service or receiving qualifying military orders for a permanent change of station or to deploy to another location.

This week’s settlement, which must be approved by the U.S. District Court for the Northern District of Texas, resolves a lawsuit filed by the Department of Justice. The lawsuit alleges that Santander unlawfully denied early motor vehicle lease terminations to ten servicemembers.

Under the proposed settlement, Santander must pay $94,282.62 in compensation to the ten aggrieved servicemembers and a $40,000 civil penalty to the U.S. Treasury. As part of the agreement, the company has also updated its SCRA procedures and training.

The department’s investigation, which began in 2019, stemmed from a complaint submitted by U.S. Army Captain Eric McDowell. Captain McDowell entered into a three-year lease in October 2017 for a Jeep Grand Cherokee, but he learned in May 2019 that he was going to be deployed to Afghanistan. In August 2019, he returned the vehicle to Santander and tried to terminate the lease, but the company denied his termination request. It was not until February 2020, after the United States had opened its investigation and six months after Captain McDowell returned his vehicle to the dealership, that Santander finally approved the lease termination, voided early termination charges, and refunded the lease amounts that had been paid in advance. Captain McDowell faced significant stress during his deployment to Afghanistan as a result of this six-month delay. The department’s investigation uncovered nine additional servicemembers whose SCRA rights it alleges Santander violated.

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Servicemembers and their dependents who believe their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations can be found at http://legalassistance.law.af.mil/.

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