Tony's NOTE:

This memo is from SCRA - a military servicemembers advocate and resource. Read down to the 7th paragraph - begins with Greystar ...

Three years ago, if you had an SCRA policy on the books, you were ahead of the game. That was enough.

Since then, everything has changed.

Since 2011, the DOJ has recovered $484 million for over 149,000 servicemembers through SCRA enforcement — roughly $32 million per year.

But the recent pace tells a different story…It's accelerating, and the targets aren't who you'd expect.

In just the last eight months, two of the biggest names in their industries got hit:

CarMax — the largest used car retailer in the country — paid nearly $500,000 after repossessing 28 vehicles from servicemembers without court orders. Some of those repos happened after the owners told CarMax they were military. When the DOJ looked deeper, they found that CarMax's compliance program didn't require a DMDC search on charge-off accounts — one category of repossession that slipped through the cracks. CarMax is now under four years of federal oversight.

Greystar — which manages over 800,000 housing units — paid more than $1.4 million for charging early lease termination fees to servicemembers relocating on military orders. When the DOJ investigated, they discovered that Greystar's property management software automatically imposed the fees, and staff were supposed to manually override them for protected tenants. That manual process failed systematically. Greystar is now under five years of DOJ monitoring and had to overhaul their software across every property.

Two very different industries, and two very different violation types.

But once you look at the pattern, you'll see the same underlying problem: a compliance process that worked for 95% of files — until the DOJ found the other 5%.

Here's what's worth paying attention to.

Neither of these companies ignored the SCRA.

Both had policies, both had processes, and both still ended up writing seven-figure checks — because having a policy is not the same as having a policy with no gaps.

When the DOJ investigates now, they're no longer just asking "do you have an SCRA policy?" They're asking questions like:

Does your process cover every category of action, or are there carve-outs where the verification step gets skipped?

When someone tells you they're military, what happens next, and is that documented?

Are your systems screening for military status before taking adverse action, or are you relying on manual overrides that can fail at scale?

Now think about your own files for a moment.

You're already using our verification service, which puts you ahead of most.

But before your next review cycle, consider this:

Is there a category of case — charge-offs, small-balance accounts, expedited actions — where the SCRA check gets skipped or treated as optional?

Is every verification documented in a way that an outside reviewer would immediately understand?

If a servicemember filed a complaint tomorrow, could you produce the paper trail within a week?

If the answer to any of those is "I'm not sure," that's not a failure...it's a gap.

And gaps are fixable.

The firms that end up in DOJ settlements aren't the ones with no process at all.

They're the ones who assumed their process was complete, until someone proved it wasn't.

After 15 years of doing this work, I've seen most of the gaps that show up, and they tend to follow the same patterns.

The firms that catch them early do it by having someone outside their process look at it once. The ones that don't find out the hard way.

Best,

Roy Kaufmann

Director

Servicemembers Civil Relief Act Centralized Verification Service (SCRACVS)

"Some of those repos happened after the owners told CarMax they were military."

So, does that mean that if you are military that you get to be irresponsible and not pay as agreed? They don't have to make their car payments?

"Greystar — which manages over 800,000 housing units — paid more than $1.4 million for charging early lease termination fees to servicemembers relocating on military orders. When the DOJ investigated, they discovered that Greystar's property management software automatically imposed the fees, and staff were supposed to manually override them for protected tenants. That manual process failed systematically. Greystar is now under five years of DOJ monitoring and had to overhaul their software across every property."

"Greystar's property management software automatically imposed the fees, and staff were supposed to manually override them for protected tenants. That manual process failed systematically."

"Greystar's property management software automatically imposed the fees,..."

"That manual process failed systematically."

Was it the manual process that failed or the automatic process?

"Two very different industries, and two very different violation types."

Actually, it seems like two different situations. The first one reads as if the car payments are just not being made, thus the fault of the service member, whereas the second one reads as if it is the fault of an automated software.

No, 6X6, it means that when military is transferred, they can legally break their lease with no repercussions. They can not be charged lease termination fees of any sort.

I don't know about car repossession, but it is going to be much the same thing. If they get reassigned to a different location there will be something about no fees for late payments or perhaps they can return the car. A car guy will have to tell us what that is about. It will be something to protect service members who are transferred.

Having a set of orders isn't enough. The PCS orders have to be a move greater than 50 miles away from the original location.