WASHINGTON, D.C. -

Repossession of 113 vehicles and violations of vehicle-lease mandates are going to cost Nissan Motor Acceptance Corp. (NMAC) nearly $3 million.

The Department of Justice recently announced that NMAC has agreed to pay almost $3 million to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA). The suit alleged that NMAC repossessed 113 vehicles owned by SCRA-protected servicemembers without first obtaining the required court orders, and failed to refund up-front capitalized cost reduction (CCR) amounts to servicemembers who lawfully terminated their vehicle leases early after receiving military orders.

This settlement is the Justice Department’s 10th settlement with an auto-finance provider since 2015 and “exemplifies continued efforts” to enforce the SCRA’s vehicle repossession and lease termination provisions.

DOJ reiterated that the SCRA prohibits repossessing a vehicle from a servicemember during military service without a court order if the individual made a deposit or installment payment on the contract before entering military service. The SCRA also permits servicemembers to terminate 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 vehicle leases, the SCRA requires that they are to be refunded all lease amounts paid in advance for a period after the effective date of the termination.

The Justice Department acknowledged that individuals who lease vehicles from NMAC often have activities similar to what other captives orchestrate, including a contributing of an up-front monetary amount at lease signing in the form of a cash payment, credit for a trade-in vehicle, rebate or other credit. A portion of this up-front amount can be applied to the first-month’s payment and certain up-front costs such as licensing and registration fees.

The remainder, which is called the CCR amount, reduces the monthly payment the lessee must make over the term of the lease. The Justice Department’s investigation revealed that when servicemembers terminated their vehicle leases early pursuant to the SCRA, NMAC retained the entire CCR amount.

The agreement resolves a suit filed by the Department of Justice in the United States District Court for the Middle District of Tennessee. It covers all repossessions of servicemembers’ vehicles and leases terminated by servicemembers since Jan. 1, 2008.

The agreement requires NMAC to create a $2,937,971 settlement fund to compensate servicemembers whose rights were violated under the SCRA.

Additionally, NMAC must pay $62,029 to the United States Treasury.

The agreement also requires NMAC to revise its policies and procedures to prevent future unlawful repossessions of servicemembers’ vehicles and ensure that servicemembers who terminate their auto leases early receive a full refund of all eligible pre-paid CCR amounts.

NMAC must also provide training to its employees and representatives.

“Men and women in uniform risk their lives to serve our country, and Congress enacted the Servicemembers Civil Relief Act to protect them when they serve our nation,” assistant attorney general Eric Dreiband of the Justice Department’s Civil Rights Division said in a news release.

“The U.S. Department of Justice will continue to enforce the Act vigorously in order to protect servicemembers and to ensure that all covered industries comply fully with the law,” Dreiband continued.

“The SCRA exists to offer protections to our military service members and to minimize undue financial burdens associated with deployments and other instances where our military servicemembers experience a profound and prolonged lifestyle change,” added U.S. Attorney Don Cochran, who serves in the Middle District of Tennessee.

“We will aggressively hold those institutions and businesses accountable who are required to comply with the act. Our military deserves no less,” Cochran went on to say.