Feds: CitiFinancial to pay $907K for unlawfully seizing cars

MarketsAssociated Press

Prosecutors say CitiFinancial Credit Co. will pay $907,000 to settle a complaint that it violated federal law by repossessing the vehicles of active military personnel.

The settlement approved Monday by a federal court in Dallas reveals that CitiFinancial pursued repossessions even when it had evidence in its records showing service members were protected from such action.

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Authorities say CitiFinancial Auto Corp. from 2007 to 2010 repossessed 164 automobiles owned by military personnel without first obtaining the required court approval.

In several cases, loan notes indicated that CitiFinancial was aware that the borrower had been ordered to report for military service.

Personnel whose vehicles were unlawfully seized were each compensated $5,000 in the agreement.

The settlement says CitiFinancial cooperated with the federal investigation and denies any liability or wrongdoing.