Hyundai Motor America and its sister company Kia Motors America have agreed to a settlement over accusations from the United States Justice Department that they wrongly repossessed the vehicles of U.S. military service members. According to the Servicemembers Civil Relief Act (SCRA), it is illegal to repossess a service member’s vehicle while they are in active duty, without a court order, if they made a deposit or installment before entering military service.

The companies allegedly violated the SCRA by repossessing 862 vehicles between 2010 and 2020 from protected service members without acquiring the necessary court orders. Under the settlement terms, Hyundai and Kia will pay $5 million into a fund to compensate affected service members, a compliance audit will take place, and additional staff will be hired to oversee SCRA compliance. The companies also must update their policies and procedures to prevent unlawful repossessions in the future and to determine whether a car/vehicle owner is protected by the SCRA before executing a repossession.