{"id":7719,"date":"2026-08-18T10:03:15","date_gmt":"2026-08-18T15:03:15","guid":{"rendered":"https:\/\/niada.com\/dashboard\/?p=7719"},"modified":"2026-08-18T10:03:18","modified_gmt":"2026-08-18T15:03:18","slug":"scra-violations-are-costing-dealers-six-figures-heres-what-to-know","status":"publish","type":"post","link":"https:\/\/niada.com\/dashboard\/scra-violations-are-costing-dealers-six-figures-heres-what-to-know\/","title":{"rendered":"SCRA Violations Are Costing Dealers Six Figures \u2014 Here’s What to Know"},"content":{"rendered":"\n

For BHPH and LHPH dealers, one wrong move on a repossession or lease termination involving an active-duty customer can carry a five- or six-figure price tag. Willful violations can even come with criminal penalties. The Department of Justice has prioritized enforcement of the Servicemembers Civil Relief Act (SCRA) in 2026, reaching multiple settlements with auto dealerships, lenders, and towing companies over vehicle repossessions carried out without a required court order.<\/p>\n\n\n\n

The SCRA protects servicemembers from certain legal and financial burdens tied to military service. For dealers, the most relevant provisions include: a court order is required to repossess a vehicle if the servicemember made any payment before entering active duty, even if the loan is later in default; interest on debt incurred before service must be capped at 6%, with excess interest forgiven rather than deferred; and members called to active duty may terminate certain vehicle leases early without penalty, with deposits and prepaid amounts refunded.<\/p>\n\n\n\n

Recent DOJ settlements have totaled hundreds of thousands of dollars per case, covering both direct payments to affected servicemembers and civil penalties. Dealers should verify a customer’s military status through the Defense Manpower Data Center before repossessing any vehicle or terminating a lease, train staff on SCRA obligations, and keep clear documentation of compliance steps.<\/p>\n

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