Complying With the Servicemembers Civil Relief Act Doesn’t Have to be Difficult for Lenders

In a Nutshell: Lenders have options when dealing with borrowers who don’t repay loans. But creditors who want to avoid penalties should verify a borrower’s military status before pursuing collections efforts. The Servicemembers Civil Relief Act Centralized Verification Service helps lenders confirm a borrower’s military status and comply with governmental regulations.

The world just can’t get enough of superheroes. Many films and TV programs featuring superheroes today revolve around leading characters I’ve never even heard of. And, for the superheroes we are all familiar with, such as Superman and Spiderman, movies not only portray their biggest and boldest adventures but focus on their origin stories and pivotal moments in their private lives.

Everyone’s wowed when a superhero jumps over a tall building or lifts a bulldozer with their pinkie finger, but I’ve always been fascinated by the lengths they go to to preserve their secret identities. Some superheroes use civilian disguises that allow them to blend into their surroundings. But others simply put on a pair of glasses or part their hair in a different spot to conceal their identity.

Servicemembers are real-life superheroes. But we can’t easily tell whether someone is or was a servicemember just by looking at them. 

The Servicemembers Civil Relief Act Centralized Verification Service (SCRACVS) helps verify whether someone is a member of the military. We spoke with Roy Kaufmann, the organization’s President, to learn more about its services and how it aids collections and compliance efforts.

Creditors and other parties who seek court judgments against an individual or try to collect debts from them must verify their military status to avoid fines and various penalties. You need someone’s Social Security number or date of birth to determine whether they’re a member of the military. Kaufmann told us he started SCRACVS (https://www.servicememberscivilreliefact.com/) to help businesses and individuals verify military statuses.

“It can be difficult to get military verifications, especially if you’re a landlord who doesn’t generally obtain Social Security numbers,” Kaufmann told us. “The Department of Defense will verify a military status without a Social Security number, but they’ll print this big disclaimer on it that says they can’t confirm whether the information is correct because they’ve only been supplied with a date of birth.”

Anyone who’s had their identity stolen or information hacked knows how important it is to protect personally identifiable data, including Social Security numbers.

The Servicemembers Civil Relief Act Centralized Verification Service has access to confidential databases that help them locate Social Security numbers of individuals in question. Kaufmann told us that although SCRACVS collects Social Security numbers to verify military statuses, it doesn’t share the numbers with anyone outside the U.S. Department of Defense.

If you’re not familiar with the Servicemembers Civil Relief Act (SCRA), don’t worry, you’re not alone. Kaufmann told us the act used to go by a name that rolled off the tongue a bit easier — the Soldiers and Sailors Act. 

Regardless of its change in name over the years, the act provides servicemembers with protections that allow them to focus less on their finances and more on serving their country. For example, a plaintiff cannot foreclose on a property, including homes and some business properties, that belongs to a person who is on active duty. Kaufmann told us some of the rights servicemembers enjoy under the Servicemembers Civil Relief Act can extend for 90 days to one year after the termination date of their active duty.

The Servicemembers Civil Relief Act offers other protections to covered individuals that center on insurance products and interest rates on loans and credit cards.

“The SCRA is basically a protection of the military,” Kaufmann told us. “But it’s also a protection against the lenders, towing companies, and repossessors who might accidentally go after somebody who’s entitled to these protections. The Justice Department has made it very clear they’re going to go after banks and repossessors who don’t take the time to verify whether a person is entitled to these protections.” 

Sometimes people cut corners in life to try and save time. But, when cutting a corner leaves you on the wrong side of the law, it can end up draining your time, not preserving it. 

Think of someone who drives through a stop sign without stopping. Sure, they might save a few seconds by continuing to drive. But, if they’re spotted and then pulled over by a police officer, they’re going to be losing much more than a few seconds of their time.

Kaufmann told us it doesn’t take a lot of time or money to comply with the Servicemembers Civil Relief Act. His company charges $40 per name search and will refund that fee if it can’t find the name. 

The Servicemembers Civil Relief Act Centralized Verification Service helps keep the legal system moving. Kaufmann told us that 70 to 80% of the organization’s clients are lawyers who are prosecuting cases, including default judgments on behalf of banks and other lenders.

“It’s easier for most people to delegate military-verification responsibilities to us,” Kaufmann told us. “Sometimes they do that piece by piece, and other times they’ll send us a huge list of names in a spreadsheet. We’ll take that information, massage it, and return the list with the additional information included of whether the person or people in question were in the military or not.”

Businesses offer new products and services to keep their customers happy and attract new ones. The Walt Disney Company makes films and other forms of media and entertainment, but it also owns and operates theme parks to reach more customers. Kaufmann told us the Servicemembers Civil Relief Act Centralized Verification Service does more than verify the status of servicemembers.

Though people armed with an individual’s Social Security number can go straight to the Department of Defense for assistance in verifying an individual’s military status, that department does not issue affidavits. An affidavit is a written, sworn statement which can be used in court as evidence. Kaufmann told us the Servicemembers Civil Relief Act Centralized Verification Service issues affidavits that lenders can immediately use in court.

If you require the Servicemembers Civil Relief Act Centralized Verification Service to research an individual and you have their Social Security number, then the company’s services become even more affordable.

“It’s vastly cheaper, only twenty cents per name, if you already have their Social Security number,” Kaufmann told us. “When it comes to affidavits, some lawyers who represent lenders don’t want to go out on a limb and sign an affidavit themselves. They’d rather shift the responsibility to prepare affidavits to us.”

If you have ever taken a class that covered sales or establishing a new business, you’ve probably heard that it’s cheaper to retain a customer than it is to acquire a new one. Kaufmann told us that approximately 80% of Servicemembers Civil Relief Act Centralized Verification Service clients are repeat customers. 

The Servicemembers Civil Relief Act Centralized Verification Service takes pride in turning around customer requests quickly. Kaufmann told us the company can complete research projects the same day a client requests them. 

“Sometimes things slide into the next day because of the time differences in the U.S.,” Kaufmann told us. “We’re in Washington, D.C., so if somebody from California needs something in the afternoon, we may be closed by that point and have to handle it in the morning. But we’re almost always able to complete requests within 24 hours.”

Some governmental regulations can seem like nuisances that only exist to slow a business down. But regulations exist for a reason, and businesses who don’t comply with them can face penalties. Kaufmann told us the U.S. Department of Justice has become more aggressive in enforcing that companies verify a person’s military status.

“There’s some common sense that people have to really bring here to realize that the whole purpose of the SCRA is to really protect the people that deserve protection,” Kaufmann told us. “Banks and lenders should be very cautious if they even have an inkling that somebody’s entitled to protections of these kinds. If a tow truck operator or repossessor sees a military uniform in the back of a truck or car they’re about to tow, then that’s a warning sign.”

The fines for violating the Servicemembers Civil Relief Act can be significant. Kaufmann told us he’s seen organizations fined up to hundreds of thousands of dollars for failing to comply with the Servicemembers Civil Relief Act. So if you’re a lender who’s looking to pursue collections efforts against someone who owes you money, take the time to make sure you understand and follow the Servicemembers Civil Relief Act.

The blog on the Servicemembers Civil Relief Act Centralized Verification Service website contains posts about lawsuits that banks and lenders have faced for violating the rights of servicemembers.

Though the Servicemembers Civil Relief Act Centralized Verification Service primarily serves those who need to verify a person’s military status, the company also provides resources to servicemembers themselves.

“Our goal is to find information and make it available to people who need it,” Kaufmann told us. “Our work is valuable to lenders, bankers, and lawyers, but we also explain to servicemembers the kinds of protections they have under the SCRA.”