“Thank you for your service. Sorry about the repossession.”
The New York Times today chronicles how the financial industry is ignoring laws protecting military members from losing cars and other possessions to lenders.
Federal law allows soldiers to terminate any real estate or auto lease when their military orders require them to do so. It also requires lenders to reduce interest rates on any loans to 6 percent.
But the soldiers are losing possessions because of the fine print in lending contracts that require them to take disputes to arbitration, rather than court. It offers them only two sites — one on the East Coast and one on the West Coast — and picks the site farthest away. And, the Times says, it prevents soldiers from banding together in a broad legal challenge.
When Matthew Wolf, a captain in the Army Reserve, was deployed to Afghanistan a year into a 39-month car lease, he turned in the car, an Infiniti, to the dealership and asked for a refund of $400 he had put down toward future monthly payments — his right under the S.C.R.A.
Nissan, which is the parent company of Infiniti, balked at Captain Wolf’s request, refusing to give him back the money. Captain Wolf and his lawyer, Thomas Booth Jr., sued Nissan on behalf of service members facing similar predicaments. But because of an arbitration clause in his lease, the lawsuit was dismissed and his dispute was sent to arbitration.
In arbitration, he was told that the fees for the case could total $8,200 — or nearly 21 times what he said he was owed.
In a statement, a spokesman for Nissan’s Infiniti unit said, “We continue to work with Mr. Wolf to resolve his complaint.”
Despite arguments that arbitration is more efficient and less expensive than court, military lawyers say cases can drag on for years.
It took more than four years after Sergeant Beard’s car was repossessed before an arbiter ruled on his case against Santander Consumer. Although Sergeant Beard was awarded $6,500, the arbiter denied his requests that Santander compensate him and his family for the wrongful repossession.
For Sergeant Beard, the real issue is all the other troops who have been victimized.
“I tried to fight for everybody, but it only ended up with me,” said Sergeant Beard, who adds that such repossessions “will destroy soldiers in combat by putting them in a position where they can’t help their loved ones.”
A commenter asks the right question. “We send our young men, husbands and wives to war. They come home injured, unemployed, and sometimes emotionally unstable and we then repossess their possessions. What kind of people are we?”