Colorado bank and credit union to reimburse borrowers’ GAP fees
BBVA USA and Air Academy Federal Credit Union will reimburse Colorado borrowers after failing to repay unfairly withheld Guaranteed Auto Insurance Fee (GAP), Colorado Attorney General Phil Weiser said Monday.
BBVA and Compass Bank, which was acquired by the Spanish institution in 2008, will pay Colorado drivers around $ 1.68 million in unreimbursed GAP fees. Air Academy Federal Credit Union is still in the process of determining its reimbursement total.
GAP insurance “is a complementary product sold to car buyers who finance their purchases,” according to a press release from the attorney general’s office. “If a buyer’s car is in an accident, the buyer’s auto insurance usually pays only the fair market value of the car, which may be less than the amount owed on the buyer’s loan. GAP applies in this situation to cancel or pay off the outstanding balance on the loan. If a borrower prepays the loan or the car is repossessed before the loan is paid off, Colorado law requires the lender to automatically reimburse borrowers for all unearned GAP payments, that is, funds that do not. pay no valuable service to consumers. . “
Previously, Wells Fargo Bank NA agreed to pay more than $ 9.5 million to 51,434 Colorado residents to settle a multi-state lawsuit filed by GAP policyholders.
“We are committed to protecting hardworking Coloradans, especially against unfair, deceptive and illegal practices that cause them stress, hardship and financial loss,” Weiser said in a prepared statement. “I am happy that this money is being returned to Colorado residents and the military who paid GAP when they purchased a vehicle. We will continue to require compliance from Colorado credit institutions to protect all consumers. “
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