GM Financial has agreed to pay more than $3.5 million to resolve Justice Department allegations that it illegally repossessed the vehicles of 71 service members and improperly denied or mishandled over 1,000 requests for lease terminations, in violation of the Servicemembers Civil Relief Act.

The investigation began with the complaint of a soldier who had terminated his lease and turned in his vehicle before being deployed — then received a letter while on deployment demanding more than $15,000 for the remaining period of his lease.

GM Financial will pay at least $10,000 to each of the 71 service members whose vehicles have been illegally repossessed since 2015, plus any lost equity on the vehicle and interest on that equity. For service members who were charged a fee when they terminated their vehicle leases, the company will refund the fee and pay additional damages of three times the fee or $500, whichever is greater. Those whose requests to terminate their lease was denied will receive a refund of certain payments, plus up to $5,000. The company is also required to make sure the troops’ credit records are repaired.

In some cases, the company has already taken remedial action; those will be taken into consideration when calculating payments, according to court documents.

GM Financial will also pay a $65,480 civil penalty to the United States.

“GM Financial has been fully cooperative and responsive throughout the investigation opened in 2018 by the Department of Justice into compliance with the Servicemembers Civil Relief Act,” said company officials in a statement provided to Military Times. They noted the settlement regards the processing of a “subset of SCRA-protected accounts.”

GM Financial neither admits nor denies any of the allegations, according to the consent order, filed Oct. 4 in U.S. District Court for the Northern District of Texas in Fort Worth.

The Servicemembers Civil Relief Act prevents a company from repossessing a service member’s vehicle without first obtaining a court order, as long as the service member made at least one payment before entering military service. It also allows troops on active duty to terminate their vehicle lease early after receiving permanent change of station orders or deployment orders for at least 180 days.

“Members of our armed forces should not have to suffer financial hardship as a result of their service to our nation,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, in an announcement of the settlement.

“The last thing service members should be worried about while deployed is paying off vehicle leases they don’t want and can’t use,” said U.S. Attorney Chad E. Meacham for the Northern District of Texas, in the announcement.

The Justice Department began investigating GM Financial after a receiving a complaint about the situation of Army CW3 Thomas Gorgeny, who had received orders to deploy overseas for 10 months. He had requested that GM Financial allow him to turn in his vehicle early. According to the complaint, filed in federal court on Sept. 30, Gorgeny was told by a GM Financial customer service representative that his request had been approved and that he needed to obtain a turn-in receipt. On Oct. 13, 2017, Gorgeny turned in the vehicle to the dealership where he had leased it. At that time, he had paid his lease through Oct. 25, 2017.

But while overseas in April 2018, Gorgeny received a letter from GM Financial demanding payment of $15,093.71 for the remaining monthly payments owed under the lease, as well as costs associated with the sale of the vehicle.

“Defendant’s failure to properly process his request to terminate his auto lease under the SCRA caused CW3 Gorgeny significant stress during his deployment,” the complaint alleged. “While overseas, he had an incorrect bill of $15,093.71 hanging over his head, along with the risk of negative financial consequences if he did not pay it, despite previous assurances that his early termination had been approved.”

According to the Oct. 4 consent order, within 30 days GM Financial will notify the 71 service members whose vehicles were repossessed, and will deliver payment within 21 days after receiving signed documents from the service members.

For the other 1,000 service members who were subject to overcharges, overpayments and delayed refunds, GM Financial will generally deliver payment within 45 days.

Since 2011, the Justice Department’s enforcement of the SCRA has resulted in more than $480 million in monetary relief for more than than 123,000 service members, according to Justice officials. Service members and their family members who believe their rights may have been violated should contact their nearest military legal assistance program office.

Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book "A Battle Plan for Supporting Military Families." She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.

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