Nissan Motor Acceptance Corp. is paying $3 million to settle a lawsuit filed by the Department of Justice over allegations it improperly repossessed vehicles and terminated leases of active U.S. military members protected by the Servicemembers Civil Relief Act.
The suit, filed Thursday in U.S. District Court for the Middle District of Tennessee with a pre-negotiated settlement, alleged Nissan Motor Acceptance repossessed 113 vehicles owned by service members without obtaining required court orders and failed to provide refunds to service members who lawfully terminated vehicle leases after receiving military deployment orders.
Under the settlement, Nissan Motor Acceptance will create a fund with $2,937,971 to compensate service members and pay an additional $62,029 to the U.S. Treasury, the Department of Justice said in a statement.
The Justice Department said the settlement covers all repossessions and terminated leases by service members since Jan. 1, 2008.
"Nissan Motor Acceptance Corporation (NMAC) respects and appreciates the service and sacrifice of military personnel and their families," a Nissan Motor Acceptance spokeswoman said in an emailed statement. "NMAC denies any wrongdoing but has agreed to settle with the Department of Justice (DOJ) in the best interest for all parties. NMAC worked closely with the DOJ to reach the settlement agreement and to provide appropriate relief for affected service members."
The agreement also requires Nissan Motor Acceptance to revise training, policies and procedures to prevent future repossession of service member vehicles without court orders and ensure service members eligible to terminate leases early receive appropriate refunds.
The Servicemembers Civil Relief Act prohibits the repossession a motor vehicle during military service without a court order as long as the member made a deposit or installment payment on the loan before entering service.
The law also allows service members to terminate vehicle leases early, without penalty, after receiving a qualifying military order for a change of station or deployment. It requires that service members be refunded all amounts paid in advance after the effective date of termination, the Justice Department said.