ADT to Pay $1.3M for Illegally Charging 3,400 Servicemembers Who Canceled Under the SCRA

On April 14, 2026, the Department of Justice announced that ADT LLC will pay over $1.3 million to resolve allegations that it violated the Servicemembers Civil Relief Act by imposing unlawful charges on at least 3,400 servicemembers who terminated their home security contracts after receiving military relocation orders.

The case targets a compliance gap that extends well beyond home security: consumer contract termination rights under the SCRA.

What ADT Did

The DOJ alleges that ADT illegally imposed a 30-day notice requirement on servicemembers who terminated their home security service contracts. Under 50 U.S.C. Section 3956, servicemembers can terminate qualifying consumer contracts at any time after receiving military orders to relocate to a location that does not support the contract. The termination is effective immediately upon notice to the provider.

ADT’s policy required servicemembers to provide 30 days’ advance notice before cancellation would take effect. During that 30-day window, ADT continued to charge servicemembers for services they had already requested to cancel. Across at least 3,400 affected servicemembers, those charges added up to over $1.26 million.

As Assistant Attorney General Harmeet K. Dhillon stated: “Members of our Armed Forces dutifully respond to the defense needs of our Nation, sometimes with very little notice.”

U.S. Attorney Jason A. Reding Quinones added: “Servicemembers should not have to fight companies at home while they are serving our country abroad. Orders can come with little notice and require immediate action.”

The Settlement

Under the consent order, ADT must:

• Pay up to $1,260,000 in restitution to affected servicemembers
• Pay a $79,380 civil penalty to the United States (the maximum first-violation penalty under 28 CFR Section 85.5)
• Revise its policies and procedures for handling SCRA contract terminations
• Retrain staff on SCRA requirements for consumer contract cancellation

The total settlement exceeds $1.3 million. The case was handled by the DOJ Civil Rights Division’s Housing and Civil Enforcement Section and the U.S. Attorney’s Office for the Southern District of Florida.

Why This Case Matters

The SCRA covers more than mortgages and leases

Most SCRA compliance programs focus on the protections that generate the largest settlements: foreclosure holds (Section 3953), repossession restrictions (Section 3952), lease termination (Section 3955), and interest rate caps (Section 3937).

But the SCRA also covers consumer contract termination under Section 3956. Since the Veterans Auto and Education Improvement Act of 2022, the list of covered contracts includes:

• Home security services (the ADT case)
• Commercial mobile (cell phone) service
• Internet access service
• Gym memberships and fitness programs
• Cable and satellite television

Any company providing these services to a customer base that includes servicemembers has SCRA obligations. The ADT case demonstrates that the DOJ will pursue violations in these categories with the same penalties it applies to financial institutions.

3,400 servicemembers is significant scale

Most recent SCRA enforcement actions involve dozens of affected servicemembers. CarMax: 28. S&K Towing: 148. The ADT case involves 3,400, making it one of the largest SCRA settlements by servicemember count in recent years.

The scale suggests a systemic policy issue, not individual employee errors. ADT’s 30-day notice requirement was a company-wide policy applied uniformly to servicemembers who invoked their SCRA cancellation rights. That is exactly the kind of institutional compliance failure the DOJ prioritizes.

The $79,380 civil penalty continues the pattern

This is the third consecutive DOJ SCRA settlement to apply the current per-violation civil penalty of $79,380 (28 CFR Section 85.5, effective July 2025). CarMax paid it. Now ADT. The DOJ is consistently using the updated penalty amount, which is 44% higher than the previous rate.

The Bigger Picture: $488M and Counting

The DOJ noted in its press release that since 2011, the Department has obtained over $488 million in monetary relief for approximately 152,000 servicemembers through SCRA enforcement. That is up from $484 million cited in the December 2024 DOJ/CFPB joint letter, reflecting continued enforcement activity.

The pace of enforcement in 2026 has been notable:

• February 2026: CarMax settles for ~$500K (28 illegal vehicle repossessions)
• March 2026: DOJ sues S&K Towing (148 servicemember vehicles from Camp Pendleton)
• April 2026: ADT settles for $1.3M+ (3,400 servicemembers, consumer contract violations)

Three enforcement actions in three months. Each targeting a different industry (auto retail, towing, home security). Each applying current penalty rates. The DOJ is demonstrating that no industry is exempt.

What Compliance Teams Should Take Away

1. Audit your contract termination policies. If your company provides home security, mobile, internet, gym, cable, or satellite services, check whether your cancellation process includes notice periods, early termination fees, or other conditions that could conflict with Section 3956. The SCRA requires that termination be effective upon notice, not 30 days later.

2. The SCRA applies to consumer services, not just financial products. ADT is a security company, not a bank or property manager. If your customers include servicemembers (and statistically, they do), you have SCRA obligations.

3. Systemic policies create systemic liability. ADT’s 30-day notice requirement was a company policy, not a rogue employee. When a non-compliant policy is applied to 3,400 servicemembers, the restitution alone exceeds $1.2 million. Check your policies before the DOJ does.

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