Santander Consumer Reaches $9.35 Million Settlement Over Military Repossessions

Santander Consumer USA reached a $9.35 million settlement with the Justice Department on Wednesday over accusations that the company, an auto lender, illegally seized cars from members of the military.

The deal, which still requires the approval of a federal judge, involves the largest sum ever collected by the United States for the illegal repossession of cars, and is another setback for the giant auto lender.

Under federal law, lenders like Santander Consumer USA, of Dallas, must get a court order before repossessing vehicles owned by active-duty service members.

The law, called the Servicemembers Civil Relief Act, recognizes that military members have to upend their lives, often at a moment’s notice, sometimes leaving their finances in peril. By requiring lenders to first obtain a court order, the law provides service members with a chance to delay or contest repossessions.

But Santander Consumer, prosecutors said, failed to get those court orders, leaving service members, including some who were deployed thousands of miles away, to fight at home and abroad. Prosecutors said that the lender’s repossessions stretched over roughly five years, from January 2008 until February 2013. Santander, prosecutors said, completed 760 repossessions against service members protected under the relief act.

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