Auto Dealership to Pay $137,000 for Mishandling Servicemembers’ Vehicle Leases

The Justice Department today announced that Holmes Motors Inc., a "lease here, pay here" dealership with locations in Mississippi, Alabama, and Georgia, has agreed to pay over $137,000 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by illegally repossessing vehicles owned by servicemembers and failing to refund security deposits and prepaid lease amounts to servicemembers who terminated their vehicle leases due to military orders.

"The Servicemember Civil Relief Act provides certain rights and protections to the members of our Armed Forces. These protections are designed to lessen the legal and economic burdens of military service and enable our warfighters to focus on the defense of our Nation," said Assistant Attorney General Harmeet K. Dhillon of the Justice Department's Civil Rights Division. "The Department of Justice will not waver in its commitment to enforcing these rights."

"As someone with 30 years of military service, enforcing the law to protect servicemembers' rights is of the highest priority to me and to my office," said U.S. Attorney Phillip W. Williams Jr. for the Northern District of Alabama. "The law is clear that when servicemembers are on active duty, they should not have to worry their car will be repossessed while they serve their county. I am very proud of this settlement, which ensures that companies understand that this law is not optional and servicemembers' rights will be protected in this district."

The Department alleges that Holmes Motors illegally repossessed three vehicles leased by SCRA-protected servicemembers without obtaining court orders. In at least one case, Holmes Motors repossessed a vehicle even after the servicemember gave the company a copy of her military orders requiring her to deploy in support of operations at the southern border.

The Department also alleges that Holmes Motors violated the SCRA when it failed to refund security deposits and prepaid lease amounts when servicemembers terminated five vehicle leases early after receiving qualifying military orders.

Under the settlement, Holmes Motors will pay $77,348 in compensation to the affected servicemembers. The company will also pay a $60,000 civil penalty and will be required to make policy and training changes to avoid committing future violations.

Since 2011, the Department has obtained over $489 million in monetary relief for over 152,000 servicemembers through its enforcement of the SCRA. For more information about the Department's SCRA enforcement efforts, please visit www.servicemembers.govLinks to other government and non-government sites will typically appear with the "external link" icon to indicate that you are leaving the Department of Justice website when you click the link..

Servicemembers and their dependents who believe that their rights under the SCRA may have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations can be found at legalassistance.law.af.milLinks to other government and non-government sites will typically appear with the "external link" icon to indicate that you are leaving the Department of Justice website when you click the link..