Federal prosecutors have leveled serious allegations against Hyundai and Kia's American financing arm, accusing them of unlawfully repossessing over two dozen vehicles leased by U.S. military service members. According to the prosecutors, Hyundai Capital America, a subsidiary of Hyundai Motor America and Kia America, violated the Servicemembers Civil Relief Act between 2015 and 2023 by reclaiming 26 vehicles from service members without obtaining court orders, as legally mandated.

In a lawsuit filed in federal court in Los Angeles, the Department of Justice outlined instances where service members, who had initiated loan repayments before commencing active duty, had their vehicles seized. Navy Airman Jessica Johnson's case, for instance, highlights the severity of the issue. In 2017, Hyundai Capital America seized and sold Johnson's three-year-old Hyundai Elantra, despite her active duty status, citing that she was "not deployed." Legal documents reveal that Johnson still owed $13,769 on the vehicle, and it wasn't until 2020 that the company acknowledged its error in repossessing the car.

Hyundai Capital America, headquartered in Irvine, California, has yet to provide a comment on the matter.

The Department of Justice emphasizes that members of the Armed Forces should not endure financial hardships due to their service. This lawsuit adds to a series of similar claims settled against finance arms of major corporations like General Motors, Nissan, and Wells Fargo in recent years.

Kate Gibson, a reporter for CBS MoneyWatch in New York, contributed to this report.

In conclusion, the allegations against Hyundai and Kia's American financing arm shed light on the importance of protecting the financial rights of U.S. military service members. The accusations of unlawfully repossessing vehicles leased by service members highlight the need for strict adherence to laws such as the Servicemembers Civil Relief Act. As legal proceedings unfold, it remains crucial for companies to uphold their responsibilities towards those who serve in the Armed Forces, ensuring they are not subjected to undue financial burdens due to their commitment to the nation's defense.