Most SCRA violations are preventable. They arise not from complex legal ambiguity, but from missed verification steps and procedural shortcuts.
The Servicemembers Civil Relief Act exists to protect active duty servicemembers from civil legal and financial harm that may arise while they are fulfilling military obligations. Despite the statute’s long history and well documented requirements, violations continue to surface across courts, lending institutions, and housing providers. In most cases, these violations are not the result of intentional misconduct. Instead, they stem from procedural oversights, incomplete verification practices, or outdated compliance workflows.
As federal enforcement activity increases and civil liability expands, organizations subject to SCRA obligations face heightened legal and reputational risk. Understanding where compliance failures most often occur is the first step toward preventing them. The following sections examine five of the most common SCRA violations and the measures that can significantly reduce exposure.
Military Status Verification as the Threshold Requirement for SCRA Compliance
Nearly every SCRA violation can be traced back to a failure to confirm whether an individual is on active duty at the time a legal or financial action is taken. Courts, lenders, landlords, and creditors are all required to determine military status before pursuing default judgments, evictions, foreclosures, repossessions, or interest rate enforcement.
The obligation to check military service status is not discretionary. It is a foundational due diligence requirement under the statute. When organizations rely on assumptions, outdated records, or unsupported affidavits, they expose themselves to avoidable violations. Proper verification establishes whether SCRA protections apply and determines which procedural safeguards must be followed. Without it, even otherwise lawful actions can become statutory violations.
Default Judgment Violations Resulting From Inadequate Military Status Review
One of the most frequently cited SCRA violations involves default judgments entered against servicemembers without proper military status verification. Before a court can issue a default judgment, the filing party must submit an affidavit stating whether the defendant is in military service. Errors occur when affidavits are completed without verification or when non-military affidavits rely on assumptions rather than confirmed data.
Courts that rely on inaccurate affidavits may unknowingly enter judgments in violation of federal law. These errors can result in vacated judgments, monetary penalties, and additional procedural delays. Preventing this violation requires verifying status prior to filing, ensuring affidavits are accurate and current, and monitoring military status throughout the litigation process.
Interest Rate Cap Violations Exceeding the Six Percent Limitation
The SCRA limits interest rates on certain pre-service obligations to six percent during periods of active duty. Violations commonly arise when lenders fail to identify eligible borrowers or delay adjusting interest rates after receiving notice of military service. In some cases, refunds are incomplete or miscalculated, further compounding compliance failures.
Interest rate cap violations often affect credit cards, auto loans, and mortgages. Avoidance depends on early borrower status confirmation, timely recalculation of interest, and internal systems capable of tracking service timelines. Failure to implement these safeguards can expose lenders to restitution obligations and enforcement actions.
Wrongful Eviction Actions Involving Active Duty Servicemembers
The SCRA restricts eviction of servicemembers and their dependents from residential housing without a court order when rent falls below statutory thresholds. Landlords frequently violate these provisions by initiating eviction proceedings without verifying tenant status or by bypassing required judicial approval.
Wrongful eviction cases carry significant legal consequences, including civil penalties and mandated remediation. Compliance requires tenant military status confirmation, adherence to notice requirements, and obtaining court authorization before taking possession actions. Documentation and record retention play a critical role in demonstrating compliance if disputes arise.
Unlawful Foreclosure Proceedings Initiated Without Court Authorization
Foreclosure protections under the SCRA prohibit certain foreclosure actions against servicemembers during active duty and for a specified period thereafter unless a court order is obtained. Violations occur when lenders or servicers proceed without confirming military status or misapply service timelines.
Unlawful foreclosures are among the most heavily scrutinized SCRA violations due to their financial impact on servicemembers. Preventative measures include verification before initiating foreclosure, legal review of service dates, and heightened oversight during deployment periods. Failure to follow these steps can result in substantial liability.
Improper Repossession of Property Protected Under SCRA
The SCRA restricts repossession of vehicles and other financed property when obligations were entered into before military service and payments have been made. Creditors sometimes initiate repossession without verifying service status or without obtaining the required court approval.
Improper repossession exposes creditors to damages and enforcement actions. Avoidance requires verification prior to repossession activity, careful review of contractual obligations, and procedural safeguards that pause enforcement when military service is identified.
Enforcement Trends and Legal Consequences of SCRA Violations
Federal enforcement of SCRA violations has increased steadily, with the U.S. Department of Justice pursuing civil actions against repeat offenders and systemic violators. Penalties may include restitution, civil fines, consent decrees, and mandated compliance reforms.
Beyond financial consequences, organizations face reputational harm and operational disruption. Enforcement actions often highlight failures in verification, training, and internal controls, underscoring the importance of proactive compliance programs.
Compliance Strategies for Reducing SCRA-Related Legal Exposure
Effective SCRA compliance depends on standardizing military verification procedures and integrating them into all pre-litigation and enforcement workflows. Training personnel on statutory obligations, maintaining audit-ready documentation, and conducting periodic compliance reviews are essential steps.
Organizations that treat verification as a routine procedural safeguard rather than an exception are far less likely to incur violations. Consistency, documentation, and early verification remain the most reliable defenses.
Conclusion
Most SCRA violations are preventable. They arise not from complex legal ambiguity, but from missed verification steps and procedural shortcuts. Establishing reliable military status checks and embedding them into compliance systems protects servicemembers while significantly reducing legal exposure. In an environment of increasing enforcement, verification remains the most effective compliance tool available.
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