Merchants always want to explore new areas of advertising and promotion.  Often a discount may be offered to those on active military duty.  Once a relationship is opened with a customer, there are times when the customer asks to terminate a contract or exercise some rights under the Servicemembers Civil Relief Act.

How do you verify the customer’s claim that he is on active duty?   You can request paperwork which might be cumbersome (like the Military Leave and Earnings form (“LES”), deployment orders, DD Form 214, or military ID), but you might have trouble reading the documents or determining if they are legitimate.

There is an easier way.  Inquiries can be submitted at www.ServicemembersCivilReliefAct.com.    If your inquiries exceed 750/month, you might qualify for batch services at www.SCRA.com which is a seamless, fully-automated, secure module that integrates with your own data base.

Under the Servicemembers Civil Relief Act (“SCRA”) a condition precedent to obtaining a default judgment is the filing of an affidavit.  Depending upon the jurisdiction, this affidavit may be called an SCRA Affidavit, Military Affidavit, Non-Military Affidavit, Affidavit of Military Duty, Affidavit Pursuant to the SCRA, etc.

“Judgement” as used in the SCRA, is an expansive term and covers not only the single time when a judge determines that an amount of money is owing.  It includes temporary judgments, rulings, orders, and decrees.

The affidavit has to be sworn to, be under penalty of perjury,  and must indicate one of the following:

• that the defendant in the action is NOT in military service
• that the defendant in the action IS in military service, or
• that the affiant (the person signing the affidavit) does not know if the defendant is in military service.

Great care should be taken in executing the affidavit because there can be criminal penalties, not to mention fines, if the affidavit is false.  You can research through Google the very large penalties assessed against eager creditors who filed sloppy or incorrect military affidavits in a rush to obtain a judgment.

Utilizing the Servicemembers Civil Relief Act Centralized Verification Service (SCRACVS) provides the assurance of compliance at minimal cost.

A creditor or lender is prohibited from taking action against a Servicemember simply because the servicemember has invoked his/her rights under the Servicemembers Civil Relief Act (“SCRA”).  This prohibition lasts forever (for example, the prohibition does not end when the tour of active duty ends.

But, OTHER factors may give the creditor the right to make negative comments to credit bureaus or the right to deny additional extensions of credit.  If a soldier announces that he wants the interest rate rolled back to 6%, the creditor may take no negative action.  BUT, if the soldier stops paying on the existing loan, the creditor is free to report the delinquency.

The  proposed Family Home Protection Act (H.R. 1842) would enhance the protections under the Servicemembers Civil Relief Act:

• Extend protection against foreclosure to houses purchased after entry into active military service. 
• Foreclosures stayed for any servicemember receiving imminent danger or hostile fire pay.
• Foreclosures stayed for 12 months if servicemember is medically discharged or placed on convalescent status.
• SCRA would apply to spouses of deceased servicemembers.
• Higher penalties to be assessed against lenders who discriminate against servicemembers or surviving spouses.
• Revision of definition of primary residence so that, if a servicemember is required to relocate, s/he can refinance the home.

After a servicemember asks a creditor for relief under the Servicemembers Civil Relief Act, the lender must be cautious.  Unless there are other, distinct, and relevant factors, the lender may not take adverse action against the servicemember.  The creditor may not refuse to issue other credit to the individual, just because the servicemember exercised his/her rights.  If, based upon a review of the servicemembers credit, the servicemember does not qualify, that is acceptable; but, the creditor may not base its decision solely upon the exercise of rights.  Nor can the lender unilaterally decide to change the existing credit agreement with the servicemember, or make a negative report to a credit bureau solely based upon the notification (that is not to say that, if the servicemember is delinquent, that the creditor is forbidden from notifying a credit bureau).

In Massachusetts there is a proceeding filed by a foreclosing lender soley to determine if a debtor is subject to the protections of the Servicemembers Civil Relief Act (“SCRA”).

In a recent Massachusetts Supreme Court decision, the court ruled that i) the lender had standing to bring this limited purpose action even though it had failed to show it was the holder of the mortgage or of the note (based upon the principle that the lender had a contractual right to purchase the mortgage and ii) the borrower lacked standing to contest the lender’s petition, because the borrower was not entitled to the protections of the SCRA.

See:  http://www.jdsupra.com/legalnews/mortgagee-and-mortgagor-standing-and-the-20035/

The Defense Departments Defense Manpower Data Center has announced that the last name field (which, prior to the change only required a match on the first 3 letters of the last name) now requires a correct and complete last name when perfoming and inquiry.

• Servicemembers may have had their last names changed, and the change may not yet be updated in their record.
• The site is capable of handling spaces, apostrophes, hyphens and other special characters. Input names with special characters into the last name field as they appear, e.g. Smith Doe, Smith-Doe, Le’Smith.
• Putting a suffix or any other data in the last name field which does not appear in the servicemember’s record as part of their last name may result in an inaccurate response. The DMDC site does not read the suffix field.  The suffix field is a tool to assist SCRACVA in its research.

As reported earlier, a glitch in the DMDC system has resulted in the inclusion of disclaimer language even if the full SSN was provided.  In layman’s terms, even though the user has submitted the full SSN, a disclaimer appears on the certificate that says something like “since you did not supply the SSN, the Defense Department does not guaranty the information in this certificate”.

Courts want a firm ”yes/no” response with no disclaimer.  If a litigant does not have the defendant’s SSN, the litigant should certainly utilize the SCRACVS (www.ServicemembersCivilReliefAct.com or www.SCRA.com) to obtain it so that the proof submitted to the court has no disclaimer.  With the glitch, even though the SSN is being supplied, the litigant is receiving the harmful language in the DMDC certificate.

Predictably, the courts are reacting.  One court is requiring, in a supplemental affidavit, that the user affirm that s/he supplied the entire SSN to DMDC.

This is being required regardless of the nomenclature used for the underlying affidavit  (e.g. Affidavit of Non-Military Service, Servicemembers Civil Relief Act Affidavit, Non-Military Affidavit, Military Affidavit, DMDC Affidavit, Affidavit of Military Status, Affidavit Concerning Military Active Duty Status, Affidavit of Military Service, Affidavit As To Military Service, Affidavit for Military Status of Defendant, Affidavit of Non-Military Service, and all the other creative names assigned by various jurisdictions).

SCRACVS (Servicemembers Civil Relief Act Centralized Verification Service) has  observed situations where, even though a social security number has been provided to the Defense Department DMDC, the certificates issued by DMDC are including the disclaimer that says, in effect, “you have not supplied a SSN; therefore, you cannot really rely upon this Certificate because SSNs are the only true identifier”.   SCRACVS has been informed by DMDC that it is awaiting authorization to fix the bug so that the disclaimer does not appear when the SSN is supplied. In the meantime, military affidavits that SCRACVS will prepare will be correct, but the appended Certificate from DMDC will contain the disclaimer.

The Department of Defense DMDC (Defense Manpower Data Center) released version 3.0 of its web application yesterday (February 26, 2013).  Apart from cosmetic changes, there were little changes to the single record application.  A small bug is causing the word “null” to appear by the “DoD Report ID” field, but we assume that will be fixed in the next day or so.