BMW settles U.S. claims it rejected lease refunds to military personnel

A new BMW car

BMW AG accepted to pay over $2.2 million to settle U.S. federal government claims that it failed to provide necessary refunds to 492 military personnel who lawfully terminated their automobile leases due to the fact that they were called to duty.

In the first case of its kind, the United States Department of Justice on Thursday stated BMW Financial Services NA breached the federal Servicemembers Civil Relief Act by having since August 2011 chose not to reimburse so-called capitalized expense reductions to service members who ended their leases early.

BMW’s payment consists of $2.17 million to compensate the 492 service members, including $60,788 to the U.S. Treasury. The German automaker did not confess or deny misbehavior.

Capitalized cost reductions are in advance payments made to reduce month-to-month lease payments, and usually amount to countless dollars.

In documents filed with the federal court in Newark, New Jersey, the federal government stated BMW violated the law by refusing as a matter of policy to refund such payments to service members who were called to duty for 180 days, or completely appointed to new areas.

It cited as illustrations BMW’s failure to provide refunds to two Flying force sergeants stationed at Andrews Flying force Base in Maryland, who each ended a lease for a 2015 BMW 328i due to the fact that they were respectively released for six months to Afghanistan and moved for 3 years to Japan.

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