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PNC Bank (PNC) unlawfully collects and keeps tens of millions of dollars of customer money each year in unearned GAP fees, a new class action lawsuit claims.
The nationwide class action was filed in Illinois district court Wednesday by lead Plaintiff Judith Jones alleging that PNC knowingly keeps customer GAP fees it is not entitled to.
New car owners often pay GAP fees for a GAP Waiver (which stands for Guaranteed Automobile Protection) when paying off a new vehicle. The waiver acts as a debt cancellation agreement that insures customers in the event they suffer a “total loss” of their vehicle and the actual cash value of their vehicle is worth less than the balance owed to the creditor, according to the class action lawsuit.
If a car owner has a GAP Waiver on their sales contract the creditor will agree to waive the difference – known as the “GAP.”
GAP fees are paid monthly over the life of the finance agreement. If a customer pays off the balance of their car early, contract holders are left with “unearned GAP fees” that should be refunded to the customer, states the PNC class action.
Jones added a GAP Waiver to the 72-month finance agreement on her new car that cost $695 for the full-term of her contract, according to the claim. Her contract was then sold by the auto dealer to PNC, who became responsible for collecting payments.
However, Jones paid off her car within 64 months, eight months ahead of the contract’s end date.
According to the class action, PNC recorded the pay-off electronically and in writing, but failed to refund Jones her unearned GAP fees – totaling $91.32 excluding interest.
“PNC knows these fees have not been earned, and will never be earned, but nevertheless includes them in the payoff amount when the customer pays off their contract early,” states the class action.
“As a result of this practice, PNC routinely collects and keeps tens of millions of dollars of unearned money each year that rightfully belongs to its customers.”
Unearned PNC Gap Fees Unlawfully Kept
According to the class action, PNC keeps the unearned GAP fees, unless the customer affirmatively requests a refund, which rarely happens.
“PNC is continuing its fraudulent, unfair and unlawful practice of including unearned GAP fees in the total payoff amount and refusing to automatically issue a credit or refund of those fees to its customers upon an early payoff.”
Jones is suing for breach of contract, money had and received, and declaratory relief. She wants to represent a nationwide class of people who entered into finance agreements that included GAP Waiver addendums that were assigned to PNC and who paid off their finance agreements before the end of the contract term without receiving a credit or refund of the unearned GAP fees. She also wants to represent an Illinois subclass.
The GAP fee lawsuit is not the only class action PNC has faced. In August, the bank reached a $7.5 million settlement resolving a 10 year old class action claiming that the bank improperly assessed and collected overdraft fees. More than 148,000 former customers received automatic payments in the settlement, reports Bloomberg Law.
Jones is represented by Robert A. Clifford and Shannon M. McNulty of Clifford Law Offices, P.C., Franklin D. Azar, Michael D. Murphy, Brian J. Hanlin, Margeaux R. Azar, and Alexander F. Beale of Franklin D. Azar & Associates, P.C., and Jason M. Frank, Andrew D. Stolper, and Scott H. Sims of Frank Sims & Stolper LLP.
The PNC GAP Fee Class Action Lawsuit is Jones v. PNC Bank, in the U.S. District Court for the Northern District of Illinois Eastern Division.
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30 thoughts onPNC Bank Fraudulently Kept Millions in Unearned GAP Fees, Class Action Lawsuit Claims
My original auto loan was with BBVA, BBVA was bought out by PNC. I decided to sell my vehicle and the original dealership I purchased my vehicle from cancelled both my extended warranty service and Gap Coverage. The dealership sent the check to PNC bank who cashed the check then proceeded to refund me the gap payment only, I have not received the extended warranty cancellation amount of $2600.35. Repeated conversations of being told I didn’t have extended warranty, They never received the check, I was lying, etc. Numerous excuses in which for each excuse they made I had documentation to negate their excuse including where PNC cashed the check and where it cleared the original dealerships bank. I also have proof of both contracts. I have emailed and faxed the information to their escalation team multiple times requesting to be paid the refund owed for the extended warranty cancellation with promises of them following up to resolve. Time goes on, I call for a status update and get transferred to a new escalation clerk each time and the process starts over. This has been an ongoing battle for from August 2022 to current November 9, 2022. I am looking to seek reimbursement for the owed amount and I am looking for compensation for the anxiety, stress, and financial hardship this company has put me through.
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Add me PNC also steal returns when you return something they say it never was returned and never get the money back I have receipts of returns and they claim the numbers match up in the system but I never see credit in my account
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These finance entities try to use or confuse IDs for distant expenses & when it is about so much time as Tax Credits it is even worse. The Fi-Entities should not be allowed to confuse so many locations(time zones-States) with local Banks. Reckless use of info. and soliciting is serious enough.
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My bank also did this when I traded in my truck after 2 years. They refused to refund my GAP fees. Please contact me
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