Consequences of SCRA Violations: What to Expect?

Have you ever wondered what happens when a creditor or business violates the Servicemembers Civil Relief Act (SCRA)? We’ll discuss the actions active duty service members can take and the possible consequences of not honoring SCRA protections. This will give you an idea of the penalties one can face when an entity doesn’t honor the SCRA.

The Role of the Department of Justice

The Department of Justice (DOJ) is the driving force behind SCRA enforcement. The DOJ is authorized to prosecute cases for service members and others covered by the SCRA. Most of these cases result in settlements with lenders and other companies for large sums of money, which is often referred to as equitable and declaratory relief.

In essence, this money forces the company or lender to stop the offending behavior. Some common SCRA-related cases the DOJ deals with include the following:

  • Charging above the 6% interest rate (4% for Navy Federal)
  • Continuing foreclosure proceedings without a court order
  • Retaining possession of a repossessed vehicle or personal property

Moreover, the DOJ may force the company or lender to return the money or property to the service member. They may also have to pay expensive fines for the violation. These civil penalties can be staggering — $55,000 for the first violation and $110,000 for subsequent violations.

In addition, private litigators may file lawsuits against offenders, win relief, and collect damages. F fines do not apply in nongovernmental suits, but lenders may be responsible for attorneys’ fees.

The Consequences of SCRA Violations

What happens when someone or a company doesn’t honor the SCRA rights given to those rendering military service or public health service? Usually, the penalties for banks or financial institutions are economic. Since these cases often involve an institution and not people, jail time is rare.

In federal court, the financial compensation is called equitable and declaratory relief. It can often exceed the profits made from behavior that violates the Servicemembers Civil Relief Act to act as a punishment and deterrent, discouraging a company or institution from future violations.

These punishments also involve fines. The penalties can be financially damaging, especially for small businesses, with $55,000 for the first violation and $110,000 for every violation afterward.

A successful prosecution for SCRA violations may also result in property and money being returned to servicemembers.

Attempts to Violate SCRA Have Consequences

It should be highlighted that violations do not need to be complete for lenders to face court action. Even threatening to ask for early termination charges for lease agreements or taking legal action without a court order can be enough to prompt someone from the Marine Corps or Air Force to seek assistance from the DOJ.

In addition, service members are not always required to request SCRA protection. In plenty of cases, these protections are automatic. So, the onus is upon the lender to correctly determine the borrower’s military status.

Many settlements with lenders, landlords, and storage companies require that the lender/landlord affirmatively keep track of military customers so that the SCRA benefits can be offered without being asked for.

The types of violations courts can hold lenders liable for include the following:

  • Evictions
  • Excessive interest charges
  • False affidavits
  • Foreclosure proceedings
  • Inaccurate affidavits
  • Repossessions

This is why people should only get affidavits stating active duty military service from trusted providers. The DMDC does not provide affidavits. However, the Servicemembers Civil Relief Act Verification Service (SCRACVS) does, and plenty of institutions have benefitted from their services.

What Active Duty Service Members Should Do?

If one’s active duty service materially affected their capability to honor loan payments or appear in court, they should seek legal assistance sooner rather than later. Fortunately, the Armed Forces have plenty of free legal counsel that service members can refer to in case they need to reinforce their SCRA rights.

Alternatively, service members may seek legal counsel from a law firm or lawyer who is well-versed in SCRA rights. These experts would help give the best advice on what actions service members should take to take action against those who violate their rights.

Active duty service members may also seek the advice of other military community members. They might know someone or get connected to people who’ve faced similar situations and have taken action against those who violated their SCRA benefits.

How to Report a SCRA Violation?

If service members believe their rights under the SCRA have been violated, they should contact their local legal assistance office. They may submit a complaint to the DOJ if they’re not eligible for military legal assistance services and would like the Department to evaluate their claim.

Please note that the DOJ cannot investigate every SCRA complaint it receives. Although the DOJ files SCRA lawsuits for affected service members in the name of the United States, they cannot form an attorney-client relationship with any individual service member.  


The SCRA provides active duty service members with plenty of benefits, like the right to default judgment. When these rights aren’t honored, service members should take action and ensure that they are. Fortunately, the DOJ is on their side, and the consequences can be severe.

On the part of individuals or institutions that are required to honor SCRA benefits, they should determine if the person they’re dealing with is indeed on active duty. This is where the SCRACVS can be of assistance. The SCRACVS can certify whether a person is on active duty. Click here and verify the status today!


What is the penalty for SCRA non-compliance?

This would depend on the case, but usually, this results in $55,000 for the first violation and $110,000 for subsequent violations.

What is SCRA status? 

SCRA Status refers to a person’s active duty status.

What is the most common SCRA violation?

The most common SCRA violation involves an institution not honoring the interest rate cap afforded to active duty service members.

How to report a SCRA violation?

To report a SCRA (Servicemembers Civil Relief Act) violation, you can contact the nearest military legal assistance office or the Department of Justice.

What obligations qualify for SCRA relief?

SCRA relief applies to obligations like mortgage interest rates, rental agreements, credit card interest rates, and certain legal proceedings initiated against servicemembers.

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