Settlement costs for wrongful repossession of motor vehicles

On Behalf of | Dec 22, 2021 | Wrongful Repossession

Most auto repossession contracts include terms that are carried out legally. However, there are a few lenders and repossession companies that use unfair, deceptive practices to repossess their vehicles. Even after missing several payments, you have the right to sue for a wrongful repossession in Minnesota.

What is wrongful repossession?

The wrongful repossession of a motor vehicle is the illegitimate seizure of a debtor’s car or truck. This happens to people who owe debts, such as auto loans or student loans, and cannot make their repayments or have listed their cars as collateral.

This procedure occurs mostly to borrowers of car loans or title loans. If they miss one or more payments, their lender can take a signed contract to court and repossess the vehicle. This is a fully legal process that is protected if the borrower signs a contract agreeing to the terms.

Settlements for wrongful repossessions

In cases of wrongful vehicle repossessions, settlements vary from a few thousand dollars to several million dollars. In October 2020, the Nissan Motor Company was required to pay a $4 million settlement fee to Nissan owners who had their property unlawfully taken. The Consumer Financial Protection Bureau claimed that Nissan Motor Acceptance Corp. repossessed their vehicles in violation of consumer protection regulations.

Restitution to owners of wrongfully repossessed vehicles

For a lawsuit involving an individual, the settlement could vary from $5,000 to $100,000 or higher depending on the complexity of the situation. In class-action lawsuits, major car companies can be required to pay up to $1 million in compensation to claimants. The October settlement forced Nissan to pay a $4 million fine to their vehicle owners and stop their practices immediately.

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