Three local credit unions will reimburse some borrowers after Colorado Attorney General Phil Weiser concluded an investigation into guaranteed auto protection payments. Ent Credit Union, Premier Members Credit Union and Credit Union of Denver distributed combined refunds totaling more than $6 million.
Guaranteed car protection payments are an add-on to financed car purchases that ensure the loan can still be paid off even if the car is totaled. If the loan is prepaid, the guaranteed car protection payments must legally be returned to the borrower.
A survey of the three credit unions revealed that these payments were sometimes never made to borrowers. In the settlement, Colorado Springs-based Ent Credit Union repaid money to 19,011 borrowers, Boulder-based Premier Members Credit Union repaid money to 2,563 borrowers and Credit Union of Denver repaid amounts disbursed to 744 borrowers.
“When a consumer purchases GAP coverage and their car is then totaled, refunded or traded in, withholding payments to which they are entitled is unfair and illegal,” Weiser said in a statement.
This article was first published by BizWest, an independent news agency, and is published under a license agreement. © 2022 BizWestMedia LLC.