Companies Allegedly Illegally Sold Vehicles to Service Members: DOJ
El Paso and Dallas towing companies are facing complaints filed by the Department of Justice for the illegal auctioning of vehicles that belonged to active-duty military servicemembers. According to the Servicemembers Civil Relief Act, federal law protects military servicemembers by prohibiting towing companies from selling their cars without a court order. Several towing companies in Texas failed to abide by this regulation in recent years, and the same situation has arisen in other states, such as San Antonio and North Carolina.
Craig Powell, CEO of AutoReturn, said that there are no excuses for violating the law, even for smaller towing companies. While some companies may not be aware of every regulation they need to follow, others may lack the infrastructure to identify whether a car is registered to an active-duty service member before tow and sale. This lack of coordination may lead to complications in returning the car in question.
The DOJ filed a complaint against the city of El Paso and the two towing companies it hired, United Road Towing and Rod Robertson Enterprises Inc., for illegally auctioning off 176 vehicles without court orders. Neither towing company was available for comment. The complaint listed the city of El Paso for having no policy in place regarding compliance with the Servicemembers Civil Relief Act. Rod Robertson Enterprises Inc. had no policies to ensure compliance and sold 143 cars belonging to active-duty servicemembers between 2015 and 2019. United Road Towing had policies in place but still sold 33 cars to people protected by the federal law between 2019 and early 2020.
In Dallas, the DOJ filed a similar complaint against United Tows LLC in September 2020, citing illegal auctioning of five cars that belonged to active-duty servicemembers without court orders. The company’s owner refused to believe that the car’s owner was an active-duty servicemember. An investigation revealed that the company had secretly done this four other times between 2014 and 2019. In July 2021, the DOJ struck a $50,000 settlement with the company.
The DOJ also filed complaints against San Antonio after the city auctioned off at least 227 cars registered to people protected by the Servicemembers Civil Relief Act between 2011 and 2019.
Powell said that the lack of standardization in how municipalities handle towing is partly responsible for this situation. There is no uniform approach to dealing with these kinds of violations at the local level, placing the burden on active-duty servicemembers to self-advocate and push the issue to get rectified, making rectification difficult in many cases.
