Attorney General Phil Weiser announces Colorado borrowers will receive $4 million in settlement with Bellco and Canvas credit unions in GAP fee case
Jan. 4, 2023 (DENVER)— Attorney General Phil Weiser today announced that his office secured $4 million in refunds for Colorado borrowers who were entitled to refunds of GAP fees from Bellco and Canvas credit unions.
Guaranteed automobile protection, commonly known as GAP, is often sold to car buyers who finance their purchase. If a buyer’s car is totaled in an accident, the buyer’s insurance typically pays only the fair market value of the car, which can be less than the amount owed on the buyer’s loan. GAP applies in that situation to cancel, or pay off, the remaining balance owed on the loan.
Borrowers pay the full GAP fee when they buy the car, but typically the fee is only earned gradually over the life of the loan. If the borrower pays off the loan early, or if the car is repossessed and later sold at auction before the loan is paid off, Colorado law requires that the borrower receive a refund of the unearned portion of the GAP fee.
An investigation by the Consumer Protection Section in the Colorado Department of Law revealed that Bellco and Canvas historically were not refunding unearned GAP fees owed to consumers.
“When hardworking Coloradans pay for GAP coverage, they deserve to receive what they are owed,” Weiser said. “My office will continue to hold accountable companies that violate the law and leave Coloradans without the money they were due.”
In today’s settlement, Bellco and Canvas also agreed to refund GAP fees to borrowers in a timely manner in the future.
Borrowers who believe they are owed a GAP fee refund because they paid off a car loan early, or had their car repossessed and sold at auction, should file a complaint here.
This latest settlement is part of Attorney General Weiser’s broader efforts related to GAP, resulting in total refunds to consumers of $23.5 million. Learn more about the Colorado Department of Law’s work to secure GAP refunds owed to consumers here.