How Tow Operators Can Avoid Costly SCRA Violations in 2026
Posted February 4th, 2026 by Peter Lukevich, JD
At Service Member Data (SMD) we hope your new year has got off to a terrific start. As we took stock of our conversations with operators across the nation, we found that one concern was consistent. They asked, “what can I do to protect myself from being sued by the Feds or my state"? This is the right question and at SMD we believe we have an answer. The new year presents an excellent opportunity to put a couple of key SCRA compliance practices in place.
First, consider training your entire staff on the important aspects of the SCRA. This basic awareness training can be done online and takes about an hour. Training topics include how to look for clues like military issued items, window stickers or decals indicating that the RO is on active duty, helping drivers understand the law applies to the Coast Guard and commissioned officers in the Public Health Services and National Oceanic and Atmospheric Administration (NOAA). Service Member Data has developed tailored online training courses that include these simple practices and other valuable insights that can be used to stay in compliance with the SCRA.
Second, help your employees help you protect your company. Make your drivers and lien/auction sales managers aware of the significant penalties that can be imposed if a violation of the SCRA should occur. Understanding that first time offender penalties under the federal law can be as high as $55,000 and include fees and costs can help convey this message and heighten the importance of staying compliant and avoiding the consequences of a SCRA violation. Understanding the law applies federally and in your state is the first step to protecting you and your business from needless litigation and penalties.
Finally, the best way to stay compliant is to take the necessary steps to verify the active-duty status of an each registered owner. Relying upon the official Deptartment of Defense (DOD) SCRA Website to give you accurate results with only a name and potentially a date of birth can lead to inaccurate results. You can see that in order to achieve accurate results the DOD suggests including the name, birthdate and SSN of the registered owner. SMD has created a process that achieves these high quality results in an accurate, reliable and fast and affordable way.
Service Member Data has experience dealing with the Department of Justice (DOJ) in resolving litigation against tow operators for violation of the SCRA. We want to use that experience to help minimize the chances of penalties and costly litigation and prevent and help keep servicemembers and towers safe from unintentional violation of the SCRA or in meeting the terms and conditions of a DOJ Consent Decree should you be investigated. Taking reasonable steps now to avoid mistakes in the future will prove invaluable in the new year as you evaluate your current business practices.
