USAlliance Financial Didn’t Refund GAP Waiver Fees, Violating the Law, Class Action Alleges

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USAlliance Financial GAP Waiver Class Action Lawsuit Overview:

• Who: USAlliance Financial.
• What: USAlliance Financial is accused of keeping unearned Guaranteed Asset Protection Waivers (GAP Waivers) fees when customers pay off their vehicles early, in violation of consumer and contract law.
• Where: The lawsuit was filed in New York.

USAlliance Financial illegally keeps millions of dollars per year in unearned fees from car buyers who purchase GAP insurance and then pay off their cars early, a new nationwide class action lawsuit alleges.

Plaintiff Shyneece Asberry filed the class action complaint against USAlliance Financial Friday in a New York federal court, alleging violations of contract law and state consumer laws.

Asberry said she is suing over the company’s alleged practice of collecting and failing to refund unearned fees from Guaranteed Asset Protection Waiver Addendums—or GAP insurance—in breach of its contracts with consumers.

“As a result of this practice, USAlliance knowingly collects and retains millions of dollars per year in unearned fees from automobile purchasers.”

USAlliance Financial Customers May Be Owed GAP Waiver Fees

GAP insurance will cover the difference between what a borrower owes on the vehicle and what the insurer is willing to pay should the vehicle be stolen or damaged beyond repair. GAP insurance typically adds $400 to $600 to the vehicle’s purchase price.

Because GAP insurance is paid for up front and covers the term of the loan, vehicle owners who are able to pay off the loan early are entitled to a refund of the unused portion of their GAP insurance under state laws. 

Under the terms of its contracts with consumers, USAlliance is required to refund to consumers all unearned fees for GAP Waiver Addendums when consumers pay off their finance agreements early, Asberry says. 

However, USAlliance fails to do so. “As a result of this practice, USAlliance knowingly collects and retains millions of dollars per year in unearned fees from automobile purchasers.”

Asberry is suing for breach of contract, unjust enrichment, and a deceptive business practice, in violation of Pennsylvania’s Unfair Trade Practices & Consumer Protection Law and New York’s General Business Law. 

She seeks to end USAlliance’s alleged practices and force it to refund unearned GAP fees.

Asberry is asking for damages, restitution and injunctive relief on behalf of the general public. 

The lawsuit is looking to represent anyone who entered into finance agreements with GAP Waiver Addendums that were assigned to USAlliance and who paid off their finance agreements before the end of the loan term but did not receive a refund of unearned GAP fees, as well as a a Pennsylvania and a New York Subclass.

In June, Wells Fargo agreed to pay $500 million to end a class action lawsuit, refunding U.S. consumers who paid off their car loans early and paid what they say were improper GAP insurance fees.

Have you paid GAP fees to USAlliance Financial? Tell us about it in the comment section below!

The plaintiffs are represented by Andrew J. Shamis of Shamis & Gentile, P.A. 

The US Alliance Federal GAP Fees Class Action Lawsuit is Asberry et al., v. US Alliance Financial, Case 7:21-cv-07582, in the U.S. District Court for the Southern District of New York. 

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