LITTLETON, Colo.–Red Rocks Credit Union has become the latest CU in this state to be ordered to return funds to members related to unearned guaranteed automobile protection (GAP) premiums.
Colorado Attorney General Phil Weiser said the $355-million Red Rocks Credit Union refunded members more than $300,000 after it “failed to return money consumers were entitled to under state law.”
The AG’s Office announced Red Rocks Credit Union reached a settlement with consumers earlier this year and paid $312,267.84 to 1,328 consumers after the credit union failed to return GAP refunds from Oct. 1, 2014, to July 1, 2020. The credit union also agreed in the class-action settlement to pay 8% interest to consumers, LawWeek Colorado reported.
According to the AG’s office, “Red Rocks Credit Union was aware of the Colorado Department of Law’s ongoing GAP enforcement actions against other lending institutions. Before agreeing to the class-action settlement, the credit union sought an agreement to release it from any legal action if it paid full refunds plus interest to Colorado consumers,” LawWeek Colorado stated.
‘Unfair & Illegal’
“This settlement reflects our office’s efforts to ensure hardworking consumers are not cheated out of money, even by trusted lending institutions whose business practices must comply with Colorado law,” said Weiser in a statement. “Denying a consumer GAP refunds to which they are entitled is unfair and illegal.”
Going forward, the credit union will ensure GAP refunds are made to all its customers under Colorado law, according to the AG. The June 23 settlement also requires Red Rocks Credit Union to verify the refund totals and allows the department to audit the credit union anytime within the next 12 months to ensure accuracy and compliance with consumer protection laws.
Earlier, the AG’s Office has secured GAP refunds from other banks and credit unions, including more than $9.5 million from Wells Fargo, $1.68 million from BBVA USA (formerly known as Compass Bank) and more than $6 million from Ent Credit Union, Premier Members Credit Union and Credit Union of Denver.
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