In a move highlighting consumer protection, Colorado Attorney General Phil Weiser announced that Red Rocks Credit Union has refunded over $300,000 to its customers. This action comes after it was found that the credit union did not properly return Guaranteed Automobile Protection (GAP) premiums that consumers were entitled to under Colorado law.
GAP, a product often sold to car buyers financing their vehicles, is designed to cover the difference between the car’s fair market value (what insurance typically pays) and the outstanding loan amount if the vehicle is totaled or stolen. However, Colorado law mandates that if a loan is paid off early, or a vehicle is repossessed, lenders must automatically refund any unearned GAP premiums to the borrower.
An investigation revealed that Red Rocks Credit Union failed to adhere to this law between October 1, 2014, and July 1, 2020. Following a class-action settlement in early 2022, Red Rocks Credit Union compensated 1,328 consumers with a total of $312,267.84. The settlement also included an additional 8% interest payment to the affected consumers.
It was noted that Red Rocks Credit Union was aware of the Colorado Department of Law’s ongoing enforcement regarding GAP refunds within the lending industry. Prior to the class-action settlement, the credit union sought an agreement with the Department of Law, aiming to resolve potential legal actions by providing full refunds with interest to Colorado consumers.
“This settlement underscores our commitment to protecting hardworking Coloradans from unfair financial practices, even by trusted institutions like Red Rocks Credit Union, which must operate within the bounds of Colorado law,” stated Attorney General Weiser. “Denying consumers their rightful GAP refunds is not only unfair but also illegal.”
Moving forward, Red Rocks Credit Union has committed to ensuring all customers receive their due GAP refunds in accordance with Colorado law. The settlement agreement also mandates that Red Rocks Credit Union must verify refund totals and allows the Department of Law to conduct audits within the next year to ensure ongoing compliance with consumer protection laws.
This case is part of a broader effort by the Attorney General’s office, which has successfully secured over $19 million in GAP refunds for Colorado consumers. Previous settlements include significant amounts from institutions like Wells Fargo (over $9.5 million), BBVA USA (formerly Compass Bank) ($1.68 million), and a collective settlement with Ent Credit Union, Premier Members Credit Union, and Credit Union of Denver (over $6 million).
The Uniform Consumer Credit Code Administrator, operating within the Consumer Protection Division of the Department of Law, is leading these investigations. Beyond enforcement, this administrator is also responsible for licensing, regulating, and examining various lenders and their contractors.
Consumers in Colorado who believe they are owed a GAP refund due to early loan payoff or insufficient GAP coverage benefits can file a complaint through the Attorney General’s website.
For media inquiries, please contact:
Lawrence Pacheco
Director of Communications
(720) 508-6553 office | (720) 245-4689 cell
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