Allegations of Illegal Vehicle Repossessions Target Hyundai and Kia's American Financing Arm
Accusations have surfaced against Hyundai and Kia's American financing arm for repossessing over two dozen vehicles leased by U.S. military service members without obtaining court orders, as mandated by law, federal prosecutors revealed on Wednesday.
The lawsuit filed by the Department of Justice in federal court in Los Angeles claims that Hyundai Capital America, a subsidiary of Hyundai Motor America and Kia America, violated the Servicemembers Civil Relief Act between 2015 and 2023 by confiscating 26 vehicles owned by service members who had started loan payments before commencing active duty.
One specific case highlighted in the legal documents involves the seizure and sale of a three-year-old Hyundai Elantra owned by Navy Airman Jessica Johnson in 2017. Despite Johnson being on active duty but not deployed, Hyundai Capital America repossessed the vehicle, which still had a remaining balance of $13,769 in 2020, leading the company to acknowledge its error.
Hyundai Capital America, headquartered in Irvine, Calif., has yet to provide a response to the allegations.
The Department of Justice emphasizes that members of the Armed Forces should be shielded from financial distress due to their service, citing previous settlements with the finance divisions of General Motors, Nissan, and Wells Fargo over similar claims.
