DENVER (CBS4) — The Colorado Attorney General’s Office announced Thursday that refunds totaling more than $6.5 million have been issued to thousands of Colorado vehicle owners following an ongoing investigation into the auto loan market.
Ent Credit Union issued 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, reported the state office.
The refunds relate to Guaranteed Automobile Protection (GAP), a product sold to car buyers who have financed the purchase of their vehicle. The GAP purchase applies to the loan balance if, for example, a car is destroyed in an accident and the buyer’s auto insurance covers less than the amount still owed on the buyer’s loan.
A spokeswoman for the Attorney General’s Office, Emily Wegner, confirmed three scenarios in which customers request refunds: if the buyer prepays the loan, if the car is totaled or repossessed before the loan is paid off, or if a consumer cancels the purchase of the GAP product within the first 30 days and requests a refund. Colorado law requires the lender to automatically reimburse borrowers for any unearned GAP payments.
The latest repayments bring the total guaranteed by state investigations to more than $19 million. Previous GAP repayment deals were with Wells Fargo and BBVA USA (formerly Compass Bank) last year.
Borrowers who believe they are entitled to a GAP fee refund because they prepaid an auto loan or did not receive the full benefits of GAP coverage can file a complaint here: https://coag. gov/file-complaint/credit-and-debt-complaint/