Red Rocks Credit Union has agreed to resolve claims that it failed to refund customers for GAP insurance refunds with a settlement of approximately $394000. The settlement terms will benefit consumers who had a loan with Red Rocks Credit Union with GAP protection in Colorado which was paid off before time between 1st October 2014 and 1st July 2020 but didn’t receive a GAP refund. However, borrowers whose vehicles were repossessed by Red Rocks due to failure in making loan payments are not included in the settlement.
Settlement Website: RRCUGapSettlement.com
Objection Deadline: 08/04/2022
Exclusion Deadline: 08/04/2022
Deadline For Submitting Claim Form: Not applicable
Final Hearing Date: 09/08/2022
Settlement Amount: $394K
Potential Claim Amount: Variable
Proof Of Purchase: Not applicable
Claim Form: Eligible class members will receive their settlement payment automatically in their Red Rocks Credit Union account or through the mail as a check if they aren’t a Red Rocks account holder. Thus, no claim form will be required to benefit from this settlement.
Red Rocks Credit Union is a financial institution based in Colorado offering a variety of services including GAP insurance and automotive loans. GAP protection is an addition to a customer’s Finance Agreement guaranteeing that the creditor on the Finance Agreement will waive certain amounts owed if the customer’s car is stolen or totaled.
A class-action lawsuit has been filed against Red Rocks as they allegedly violated Colorado law by failing to refund unused GAP coverage to customers when they paid off their loans early. According to the lawsuit the customers are entitled to a partial refund or credit of the amount paid for GAP protection if they pay off the finance agreement early.
However, Red Rocks failed to refund its borrowers for the unused portion of their GAP insurance on paying off early. Colorado law requires refunds for “unearned” fees and the actions of Red Rocks allegedly violated the same. Though Red Rocks Credit Union hasn’t confessed any wrongdoing, they have agreed to resolve all allegations brought against them with a $393,522.10 settlement. This comprises a payment fund of $312,267.84 and $81,254.26 in fees.
Under the settlement terms, the class members are eligible to recover payment from the fund. Each consumer can collect the full amount that they were eligible to receive as a GAP refund. The amount will vary for each class member depending on early payoff circumstances and the financing agreement. Apart from funding GAP refunds, Red Rocks have also agreed to continue a new business practice it executed after filing the lawsuit. Under this policy, Red Rocks Credit Union will ensure all GAP refunds are paid to consumers in the event of an early payoff.