Consumer rights

Stakeholders reported that service members had limited understanding of waivers of their consumer rights and protections

What GAO found

Most of the 15 stakeholders GAO interviewed said service members had a limited understanding of waivers of their consumer rights and protections under the Service Members Civil Relief Act, as amended (SCRA) . SCRA rights and protections include the ability to terminate a residential lease without penalty for early termination during deployment and protections against certain foreclosures without a court order. Companies can ask service members to waive (that is, waive) any of their rights and protections under the SCRA.

Most stakeholders also reported that SCRA’s requirements regarding the timing, content and form of certain waivers do not ensure service members understand. For example, if a waiver concerns the termination of a lease, it must be a separate document from the lease and printed at least in 12 point format. While some stakeholders said this form requirement can increase awareness, most stakeholders said this requirement does not ensure that military personnel understand that they are giving up their rights and protections. Additionally, some stakeholders have said that understanding the waivers may be a relatively low priority for service members who receive deployment or relocation orders, as some may have a few days to travel for themselves and their families. Most stakeholders reported that service members generally do not understand the implications of waivers, and waiving rights and protections under SCRA could potentially result in a wide range of negative effects for service members. For example, most stakeholders described instances where signing a waiver could lead to negative financial outcomes, such as repossession, which might be difficult to address during deployment.

About half of stakeholders reported that another provision could also affect the rights and protections of the SCRA, namely mandatory arbitration clauses, which typically require that disputes be resolved with third-party arbitrators rather than before a court. court. As the GAO reported in 2021, mandatory arbitration clauses have prevented the military from resolving some consumer claims in court, although the Department of Justice has a separate enforcement right under the SCRA and can pursue a SCRA claim in court even when a member has signed a binding arbitration clause. .

Why GAO did this study

SCRA provides certain legal and financial consumer rights and protections to millions of service members. One of the objectives of the law is to strengthen national defense by extending certain protections to the military to allow them to devote their energy to the defense needs of the Nation. Service members can waive their rights and protections under the SCRA, and lawmakers and others have raised questions about the effects of such waivers.

The conference report accompanying the National Defense Authorization Act for Fiscal Year 2021 includes provisions for GAO to consider the effects of SCRA requirements regarding the timing, content and form of certain waivers on military personnel and to study the military use of their right to prosecute. in court under the SCRA. This report describes what the selected stakeholders reported on the service members’ understanding of waivers of rights under the SCRA.

To describe stakeholder perspectives, GAO conducted semi-structured interviews with 15 stakeholders, including Department of Defense legal aid lawyers who assist the military with their legal affairs, other officials of the military. agencies and associations that represent military, business and private lawyers. GAO identified them based on recommendations from agency officials and other stakeholders, and by reviewing a list of stakeholders also identified by GAO for related past work. Although stakeholders cannot speak directly on behalf of the military, the 15 stakeholders all have expertise with the SCRA and 14 have regular contact with the military or their representatives, spanning a variety of geographic locations and military branches. The information reported is not generalizable but provides valuable information as there is no known data on the understanding of members of the SCRA waivers department, according to stakeholders and GAO research. The GAO also reviewed relevant reports, which GAO identified based on stakeholder suggestions, and summarized previous work on the military’s use of their right to sue in court under SCRA.

For more information, contact Tranchau (Kris) T. Nguyen at (202) 512-7215 or [email protected]

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