Towing and Repossession Companies – The Justice Department will come if you take shortcuts!

The U.S. Justice Department filed a lawsuit on March 3, 2023 against a towing operator, alleging that it auctioned off cars without doing adequate verifications under the Servicemembers Civil Relief Act (“SCRA”) or filed “rubber-stamped” SCRA Affidavits while ignoring obvious signs that the owners may be in the military.

The SCRA requires a good faith effort be made to find out whether a person is on active duty.  If the plaintiff asks a court for a judgment, an affidavit of those efforts (an “SCRA Affidavit”, “Military Affidavit”, or similar names) must be submitted. If an owner is in the military, the court has to appoint an attorney for him. Although the SCRA is a federal law, you should find out if your local, state law adds any additional protections for servicemembers. Some states’ laws are summarized here

Even though a Military Affidavit can be obtained without difficulty and at a low cost from (even without a social security number), common sense dictates that, if there are other, obvious factors that indicate that a person is in the miliary, you can’t simply ignore them and rely upon an affidavit that you buy over the internet.  You have to exercise due diligence.  Remember, if a person is on active duty, they have well-deserved protections and there are serious consequences if you fail to respect those rights or take shortcuts.  Those consequences could be costly and take place in court, newspapers, or over the internet.

Some of the factors the Justice Department pointed out that the towing company simply ignored that should have alerted them to the possibility that the owners were in the military:

  • The cars were towed from locations near military installations, some even may have been towed from bases.
  • Vehicles had military decals and decorations.
  • Vehicles had military uniforms on the seats or in the trunk.
  • Vehicles had military paperwork in them, including orders.
  • Vehicles had liens from lenders that focus on military borrowers.

Towing companies need to have a checklist for employees to follow before auctioning off cars.  There is a terrific article in the January 2021 edition of the American Towman Magazine about how to design a checklist and other SCRA issues that management and employees should understand.

The SCRA is a robust law, with teeth, but compliance is easy and inexpensive.  The alternatives can be devastating to a servicemembers whose rights were ignored and to the towing company.