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DOJ settles with Texas furniture company on SCRA violations
On September 15, the DOJ announced a settlement with a Texas-based furniture and appliance company, resolving allegations that the company charged excess interest on servicemembers’ purchases in violation of the Servicemembers Civil Relief Act (SCRA). According to the press release, the DOJ launched an investigation into the company after receiving a referral from a United States Army Staff Judge Advocate. After receiving notice of the investigation, the company conducted a self-audit and determined that between March 2014 and May 2019, it had not granted the request for the full six percent interest rate cap required by the SCRA for 184 out of the 322 servicemembers that requested the relief. The complaint, filed by the DOJ in the U.S. District Court for the Southern District of Texas, states that the company “engaged in a pattern or practice of violating” the SCRA by “failing or refusing to timely and/or accurately lower the interest rate on pre-service obligations obtained by at least 184 SCRA protected servicemembers to 6% per year after being provided with the documentation required by the SCRA.”
The settlement notes that the company voluntarily disclosed its findings to the DOJ and issued over $59,000 in refund checks and over $28,000 in account credits to affected servicemembers. The settlement requires the company to pay an additional $500 to each affected servicemember, and to hire an independent consultant to determine if any other servicemembers were overcharged. Additionally, the company is required to make a $50,000 payment to the United States.