The US Department of Justice said on Wednesday it settled a lawsuit against American Honda Finance Corp., in which it alleged the auto finance entity broke the law by failing to reimburse certain lease payments to service members who put prematurely ending the rental of their vehicle.
The unit will pay more than $ 1.58 million to 714 affected military personnel, according to a Justice Department statement. The regulations also require the company to pay the US Treasury $ 64,715 to “adopt new policies and implement new training requirements.”
American Honda Finance, headquartered in Torrance, California, provides retail financing in the United States for Honda and Acura vehicles. In a complaint, the Justice Department said the company specifically failed to reimburse the vehicle trade-in credit that had been applied to the reduction in capitalized costs.
The department said it violated the Servicemembers Civil Relief Act, a law enacted in 2003 that provides financial protections to active duty members. The law requires service members who legally terminate vehicle rentals to obtain reimbursement of any rental amounts they have paid in advance, according to the ministry.
“American Honda Finance Corporation has reached an agreement with the Department of Justice regarding errors in processing vehicle loans to active-duty military personnel under the Servicemembers Civil Relief Act,” the financial services unit said in a statement. press release provided to Automotive News. “AHFC has reimbursed affected military customers and revised its procedures.”
The settlement has yet to be approved by the U.S. District Court for the Central District of California.