ALEXANDRIA, Va. (CN) – Capital One Bank will pay $12 million for wrongfully foreclosing on active-duty military personnel’s homes and overcharging them on credit cards and car loans, federal prosecutors said.
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Uncle Sam accused Capital One of violating the Servicemembers Civil Relief Act, in Federal Court.
“The settlement covers a range of conduct that violated the protections guaranteed [to] service members by the SCRA, including wrongful foreclosures, improper repossessions of motor vehicles, wrongful court judgments, improper denials of the 6 percent interest rate the SCRA guarantees to service members on some credit card and car loans and insufficient 6 percent benefits granted on credit cards, car loans and other types of accounts,” the U.S. Attorney’s Office said in a statement.
It its settled complaint, the government accused Capital One Bank of repossessing cars and foreclosing on houses belonging to service members without court orders, and denying them lower interest rates.
Capital One agreed to pay $7 million in damages to service members for SCRA violations, including at least $125,000 in compensation to each servicemember whose home was illegally foreclosed upon, and at least $10,000 to servicemembers whose cars were repossessed.
It agreed to pay $5 million to compensate members who did not receive SCRA benefits on their credit card accounts and financing loans.
The Justice Department said Capital One cooperated with its investigation, and agreed to pay more than $12 million if audits turn up more violations.
The settlement must be approved by a federal judge.
Capital One’s slogan is “What’s in your wallet?”