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HSBC fined for illegally seizing vehicles of military members

Some military servicemembers and reservists called up for active duty are paying the price off duty because businesses are not following financial rules protecting military members and their families.

The major law involved is the Servicemembers Civil Relief Act. This covers everything from repossession of a car to an attempted foreclosure.

Just last month, HSBC agreed to a $435,000 fine for repossessing cars of military members without a court order. The banking giant had sold its car lending operations to a U.S. subsidiary of the Spanish banking giant Santander, which also seized cars without a court order and agreed to pay nearly $11 million in restitution to servicemembers.

Local lawyer Robert Singer, a Naval Reserve lieutenant commander, says information about who is in the military is readily available from the U.S. Defense Department.
"As a creditor, I do this for some commercial clients I have now in my private practice. The advice is, 'Hey, when you're trying to execute some type of judgment or lien or repossess property, do a simple check with the DOD, make sure this person is not a service member, because under the law you're strictly liable as a creditor for whatever action you take." Singer says.

Singer says active duty military units are pretty good about making sure unit members are aware of the rules and what they should do before going on deployment. However, he says that may not be as true in reserve units where people can be activated individually and may not know all of the rules.

The JAG lawyer says there is the problem that some lending institutions and other businesses will do what they want, from repossessing cars to foreclosing on homes despite what the law requires.

Mike Desmond is one of Western New York’s most experienced reporters, having spent nearly a half-century covering the region for newspapers, television stations and public radio. He has been with WBFO and its predecessor, WNED-AM, since 1988. As a reporter for WBFO, he has covered literally thousands of stories involving education, science, business, the environment and many other issues. Mike has been a long-time theater reviewer for a variety of publications and was formerly a part-time reporter for The New York Times.