DENVER–Two Colorado credit unions have agreed to refund $4 million to members as part of a settlement with the state’s attorney general related to guaranteed automobile protection (GAP) fees.
Bellco Credit Union and Canvas Credit Union reached the settlement and are paying the refunds, according to Attorney General Phil Weiser's office.
"When hardworking Coloradans pay for GAP coverage, they deserve to receive what they are owed," the attorney general said in a press release. "My office will continue to hold accountable companies that violate the law and leave Coloradans without the money they were due."
At issue are funds related to the fees charged under certain circumstances.
"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," the AG’s office explained. "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."
The AG added both credit unions have said they will refund GAP fees in "a timely manner."
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