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Consumers who did not receive a GAP refund from Wells Fargo after their paying off their car loan early may be owed money.
What Is Gap Insurance?
Gap insurance is an auto insurance policy that compensates drivers for the difference between the value of their depreciated car and the amount left on their auto loan. This coverage can be helpful for drivers who are wanted to trade in their vehicle or for drivers who have badly damaged their car to the point of totaling it.
The Insurance Information Institute says that gap insurance may be a good idea for consumers who:
- Put a down payment of less than 20 percent of the car’s value
- Finance their car for longer than 60 months
- Lease the vehicle (gap insurance is often a requirement of lease agreements)
- Purchase a vehicle with a rapidly depreciating value
- Cover negative equity from a previous car loan with a new car loan
Does Wells Fargo Pay Gap Insurance Refunds?
Wells Fargo offers a Guaranteed Asset Protection(GAP) program through which they offer gap insurance. According to the bank’s website, the program covers the “gap” between the amount owed on the loan and the vehicle’s value.”
Did You Receive a GAP Refund from Wells Fargo?
Wells Fargo has been accused of failing to pay GAP refunds as it should when consumers terminate their car loan early by paying it off or selling the vehicle.
The GAP program has consumers prepay GAP fees upfront, according to Wells Fargo customers. If a consumer chooses to cancel GAP protection, any unused GAP fees will reportedly revert back to the customer, as is outlined in the GAP agreement terms.
However, consumers allege that they are not refunded unused fees when the loan is terminated early. Customers argue that since the length of the loan is reduced by paying it off early, refinancing, or selling/trading the vehicle, the unused GAP fees should be returned to them.
In 2018, a group of plaintiffs filed a lawsuit against Wells Fargo for the bank’s alleged failure to pay GAP refunds. The plaintiffs claimed that the bank violated GAP agreement terms by failing to pay unused GAP fees to consumers after they paid their loan off early, refinanced the loan, or sold the vehicle.
“Wells Fargo sits back and keeps the funds for itself knowing full well that consumers are usually unaware or forget they are entitled to refund of the unused portion of their prepaid GAP fees,” plaintiffs claim in the Wells Fargo GAP class action.
Consumers who did not receive a full GAP refund from Wells Fargo may be able to take legal action by speaking to a qualified attorney.
The Wells Fargo GAP Fees Class Action Lawsuit is Armando Herrera, et al. v. Wells Fargo Bank NA, et al., Case No. 8:18-cv-00332, in the U.S. District Court for the Central District of California.
Join a Free Wells Fargo GAP Insurance Class Action Lawsuit Investigation
If you had an auto loan through Wells Fargo and you paid your loan off early or traded it in or sold your vehicle before your loan’s full term, you may be entitled to compensation.
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11 thoughts onDid You Receive A GAP Refund From Wells Fargo?
I just realized I didn’t get my check and it was for a lot of money. ???