South Korean car manufacturers Hyundai Motor Co and Kia Motors Corp’s U.S. units have agreed to a settlement over allegations that they wrongfully repossessed military service members’ cars, the U.S. Department of Justice (DOJ) stated. This issue came to light when it was reported that the automakers allegedly violated the Servicemembers Civil Relief Act (SCRA) that safeguards military members from certain civic obligations, including car repossessions, while they are on active duty.
As per the settlement, Hyundai Motor America and Kia Motors America would pay a civil penalty of $665,000 to the United States. They are also expected to pay compensation of at least $2,275,000 to affected service members. The automakers would be providing at least $5,000 plus any lost equity in the vehicle with interest to each affected service member.
Both Hyundai and Kia stated that they remain committed to compliance with the law and have put measures in place to prevent such occurrences in the future.
