Nissan SCRA Settlement: $3 Million, Repossessions and Lease Refunds

What happened

On August 1, 2019 the United States filed a complaint and executed a settlement agreement in United States v. Nissan Motor Acceptance Corp. The complaint alleged a pattern or practice of violating Section 3952 by repossessing vehicles owned by 113 protected servicemembers without the required court orders.

The complaint also alleged a pattern or practice of violating Section 3955 by failing to refund lease amounts paid in advance in the form of capitalized cost reduction to servicemembers who terminated leases early after receiving qualifying military orders.

Two different statute sections, two different failures, one lender. The repossession claim is about cars taken; the lease claim is about money not given back.

The law behind this: 50 U.S.C. § 3952

Protection under installment contracts for purchase or lease: read the statute.

Who was covered

Servicemembers whose vehicles Nissan repossessed without a court order, and separately, servicemembers who lawfully terminated a Nissan lease early on military orders and were not refunded their capitalized cost reduction.

What the settlement paid

• $2,937,971 in damages to servicemembers and a $62,029 civil penalty to the United States, totalling $3 million.
• New policies and training to prevent future violations.

Why this case matters

Capitalized cost reduction is the down payment on a lease. When a servicemember terminates early on orders, that prepaid money is refundable, and it is the amount most often quietly kept.