$6.5 Million In Car Loan Product Refunded To Colorado Vehicle Owners
DENVER (CBS4) -- The Colorado Attorney General's Office on Thursday announced refunds totaling more than $6.5 million were paid to thousands of Colorado vehicle owners as a result of an ongoing investigation into the auto-lending market.
Ent Credit Union made 19,011 refunds to Coloradans totaling over $5.16 million, Premier Members Credit Union refunded $792,873 to 2,563 consumers, and Credit Union of Denver refunded $122,022 to 744 consumers, the state office reported.
The refunds pertain to Guaranteed Automobile Protection (GAP), a product sold to car buyers who financed their vehicle purchase. The GAP purchase applies to remainder of loan balances if, for example, a car is totaled in an accident and the buyer's car insurance covers less than the amount still owed on the buyer's loan.
A spokesperson for the Attorney General's Office, Emily Wegner, confirmed three scenarios in which customers requested refunds: If the buyer pays off the loan early, if the car is totaled or re-possessed before the loan is paid off, or if a consumer cancels the GAP product purchase within the first 30 days and requests a refund. Colorado law requires that the lender automatically refund borrowers any unearned GAP payments.
The latest refunds bring the total secured by the state's investigations to more than $19 million. Previous GAP refund settlements were reached with Wells Fargo and BBVA USA (formerly known as Compass Bank) last year.
Borrowers who believe they are owed a GAP fee refund because they paid off a car loan early or did not receive a full benefit for GAP coverage can file a complaint here: https://coag.gov/file-complaint/credit-and-debt-complaint/
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