On September 27, Colorado Democratic Attorney General Phil Weiser announced that BBVA (which is being taken over by PNC) and Air Academy Credit Union owed consumers at least $ 1.68 million in expense reimbursements. GAP.
GAP covers the difference between the actual cash value of the vehicle – the maximum an auto insurer would be obligated to pay – and the amount funded if the car or truck is totaled.
If the consumer repays their loan sooner or if their vehicle is repossessed, they may have paid for GAP coverage that no longer protects anything. Under the state’s consumer credit code, lenders must repay these “unearned GAP payments,” according to Weiser’s office.
According to the agreement signed by BBVA and the state, lenders must cut these reimbursement checks “automatically, and without waiting for a request from a consumer.”
The attorney general’s office said it discovered Compass Bank, which BBVA acquired in 2007, and the Air Academy did not.
“We are committed to protecting hardworking Coloradians, especially from the unfair, deceptive and illegal practices that cause them stress, hardship and financial loss,” Weiser said in a statement. “I am pleased that this money is being returned to Colorado residents and the military who paid GAP when they purchased a vehicle. We will continue to demand compliance from Colorado credit institutions to protect all consumers.”
The two companies acknowledged the payment problem and agreed to reimburse GAP’s income to customers. Neither has admitted responsibility. BBVA detected the problem itself and had already changed its practices and made an effort to reimburse customers before Weiser’s office called.
Air Academy did not respond to requests for comment.
“BBVA USA is pleased to have resolved the Guaranteed Automobile Protection (GAP) case with the Attorney General’s office,” a BBVA spokesperson said in a statement. “We look forward to continuing our efforts to serve Colorado residents with the full range of their banking needs.”
According to its agreement with the state, Air Academy said the non-payment of refunds “resulted from car dealerships and GAP administrators keeping GAP bonuses.” This could constitute a violation of Colorado consumer protection law by the Air Academy “in conjunction with dealers and GAP administrators,” the agreement said.
BBVA said it would pay $ 1.68 million to 5,209 Coloradans for loans that ended prematurely between June 27, 2011 and January 22, 2021. BBVA changed its practices to remain in compliance effective January 22 .
The Air Academy is investigating how much it owes, according to Weiser’s office. The credit union found 7,875 loans involving an F&I product that were prepaid between January 1, 2014 and April 1, 2021. However, it is not known how many of these included GAP. Air Academy said it changed its practices to ensure compliance effective April 1.