Posted January 13th, 2025 by Peter Lukevich
Don’t be lulled into thinking that the Servicemembers Civil Relief Act (SCRA) doesn’t apply to you and your company. Every tower that attempts to sell or auction an impounded vehicle, whether on their own or through a third party, to satisfy a lien or payment for towing, storage, and related fees in the United States is bound by the provisions 50 U.S.C. §§ 501 et seq. Remember, ignorance of the law is not a defense. Keep reading to see how the SCRA impacts you and your business.
If you’re a tower that impounds vehicles, regardless of whether you do business near a military base or facility, the SCRA applies to you under certain conditions. The state in which you operate may not have a corresponding law that deals with this subject. However, because the SCRA is a federal statute, it requires all towers to follow the provisions of the law. This can be frustrating at times. Nonetheless, be warned, failure to abide by the provisions of the SCRA can result in significant penalties to include fines, fees, and government supervised probation and scrutiny.
The law requires that every vehicle being sent to auction be screened in advance of the auction or sale to determine if the registered owner, last owner of record or person of interest indicated on the registration of the vehicle is on active duty in the US military. If this step is not taken by the tower and a vehicle is sold without strict compliance with the SCRA the tower could face severe consequences like the case of the tower in Hawaii. In short, if a vehicle is owned by a servicemember, the vehicle cannot be sold while the member is on active duty or for a minimum of 90 days after release form active duty, or if ordered by a judge after a lawsuit has been filed and completed, or upon the execution of a SCRA waiver by the servicemember.
The case in Honolulu is just one of many actions taken by the Department of Justice (DOJ) and state attorney generals. From Texas to Florida to Washington, Service Member Data LLC has found that towers are being subjected to fines in the thousands to hundreds of thousands of dollars and very large bills for legal fees and costs associated with protecting their companies from ruin. Government lawyers are experts in the law and go about their business of enforcing the SCRA with vigor and the full authority of their office. Learning you are being sued by the US Government or any state attorney general is downright threatening and will lead to a major disruption in your business practices.
Taking simple and well documented steps in advance to protect yourself and your business is critical. Do not wait until it is too late, and you’ve received a summons and complaint. Planning now and training your staff is crucial and should be done as soon as you can.
- Prepare a checklist that outlines the steps that your staff should take to try to determine if the registered owner could be a member of the US military.
- Look for military related stickers in or on a vehicle like USAA or Navy Federal Credit Union (NFCU).
- If legal in your state, conduct an inspection of the contents of the passenger compartment of the impounded vehicle that are in plain view for military style clothing or identification.
These no cost steps may help protect you from claims of violation of a state or federal consumer protection act statute which can triple any determination of financial penalties if you’re found to have violated the law. Make sure you communicate these requirements in writing and have your employees review the standards on a yearly basis and have them sign a form indicating that they have been trained and understand their duties and the SCRA.
In many cases you will rely upon the state you do business in or a third-party provider of owner information to determine the registered owner of a vehicle and lien holders if any. This is a great start. However, to get the best results, you can partner with Service Member Data and rely on our trained professionals that have been working for years to help towers comply with the SCRA. We work with you to ensure we locate every owner to the best of our ability and provide the gold standard in certificates from the Department of Defense.
The towing industry is incredibly supportive of active-duty men and women and veterans in the country. In fact, many towers are service veterans. We know from our work with towers all over the US non-compliance with the SCRA is not intentional. Lack of training in the law and not being introduced to the requirements of the law are leading to unfortunate litigation and enforcement. Service Member Data LLC is convinced that towers would not knowingly sell or auction a vehicle that belonged to a service member if they knew that was the case. We hope sharing this background and tips on compliance has helped you better understand your responsibilities under the SCRA.
Stay safe on the roadways. Thank you for your service.
Peter Lukevich
Peter Lukevich is an attorney who serves as the President and CEO of Service Member Data LLC located in Seattle, WA. Peter has also served as the Association of the Towing and Recovery Association of Washington and as an advocate for the towing industry in the legislature of Washington State. He is recognized as an expert authority on the Servicemembers Civil Relief Act (SCRA). He has experience representing towers in SCRA litigation commenced by the attorney general in his home state and has provided consultation and guidance to towers across the US on the SCRA. Service Member Data LLC provides active-duty military status determination of registered owners of vehicles that are sold to satisfy the lien or fees owed to a tower for towing and storage of an impounded vehicle.
NOTE: The contents of this blog post are not offered as legal advice or the advice and assistance of an attorney. The findings and analysis are prepared to be consistent with federal law. Each tower should consult with independent legal counsel to determine what, if any, laws apply in the jurisdiction in which the tower operates and conducts his/her business.