DOJ: CitiFinancial to pay $907,000 for repossessing cars of active duty military

CitiFinancial Credit Co. has agreed to pay $907,000 to resolve allegations that CitiFinancial Auto Corp. illegally repossessed cars owned by active members of the military, the Department of Justice announced Monday.

The Justice Department claims CitiFinancial repossessed 164 cars without court orders in violation of the Servicemembers Civil Relief Act. The law protects service members against certain civil proceedings, including vehicle repossessions, during active military service.

The agency said in several cases, loan servicing notes indicated the company had been informed that the borrower was in the military or had received orders to report for military service and repossessed the vehicle anyway.

“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 said in a statement. “This conduct clearly fell short of that and I’m grateful we were able to repair some of that harm.”

The Justice Department said the settlement resolves the lawsuit it filed against the company in the Northern District of Texas and covers vehicle repossessions that occurred between 2007 and 2010.

It follows a $10.5 million settlement the agency reached in 2015 with Santander Consumer USA Inc., the company that bought CitiFinancial Auto Corp.’s operation and assets in 2010. The Justice Department said CitiFinancial sold Santander the right to collect debts owed by service members after their cars had been repossessed.