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BMW to pay $2.2M to settle DOJ claims of SCRA violations.

The Justice Department announced that BMW Financial Services, N.A. has agreed to pay over $2M to resolve allegations that it violated the Servicemembers Civil Relief Act by failing to refund a type of up-front lease payment to 492 servicemembers who lawfully terminated their motor vehicle leases early. This is the first case brought by the Department involving a motor vehicle lessor's failure to refund lease amounts to servicemembers who exercised their SCRA rights to terminate their leases. The SCRA provides servicemembers with protections that permit them to terminate motor vehicle leases early without penalty after entering military service or receiving qualifying military orders for a permanent change of station or to deploy. When servicemembers lawfully terminate motor vehicle leases, the SCRA requires that they be refunded all lease amounts paid in advance. The agreement resolves a suit filed today by the United States in the United States District Court for the District of New Jersey. It covers all leases terminated by servicemembers since August 24, 2011. The agreement requires BMW FS to refund to each servicemember portions of the pre-paid CCR amount based on how many days were remaining in the lease. In addition, BMW FS will pay indirect damages to each servicemember of three times the refund or $500, whichever is larger. The agreement requires BMW FS to deposit $2,165,518.84 into an escrow account to compensate the 492 servicemembers whose rights were violated under the SCRA. BMW FS also must pay $60,788 to the United States Treasury. The agreement also requires BMW FS to revise its policies and procedures to ensure that servicemembers who terminate their auto leases early receive a full refund of all eligible pre-paid CCR amounts.

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Publication:The Fly
Date:Feb 22, 2018
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