Sound Credit Union collateral protection insurance $750K class action settlement

Sound Credit Union has reached a $750,000 class action settlement over allegations it overcharged borrowers for collateral protection insurance premiums, or related fees or interest.

Individuals may be entitled to a settlement payment if they: 

• Resided in Washington
• Financed a motor vehicle through Sound Credit Union
• On or after Feb. 11, 2016, were charged more for (or as a result of) collateral protection insurance than they would have been charged had Sound Credit Union notified them of alleged deficiencies in insurance coverage, used a pro rata refund message, not charged an administrative fee, or not received an administrative reimbursement from the collateral protection insurance carrier or third-party collateral protection insurance administrator.

The plaintiff alleges Sound Credit Union’s overcharges for collateral protection insurance violate the Washington Consumer Protection Act and Washington common law.

Collateral protection insurance is a type of auto insurance that protects a car against physical damage, according to Bankrate. It is typically chosen by a lender when borrowers fail to provide proof of insurance coverage, and is added on to loan payments for borrowers who fail to properly insure their car.

The Sound Credit Union class action lawsuit alleges the lender failed to notify borrowers about alleged deficiencies in their insurance coverage and improperly imposed the collateral protection insurance policies on borrowers.

Because Sound Credit Union allegedly forces the insurance upon borrowers, they do not have the ability to shop around for less expensive options, the plaintiff says. The lender also allegedly regularly fails to notify borrowers when it raises monthly payment amounts, causing them to inadvertently become delinquent on their payments and face additional fees.

Sound Credit Union denies any wrongdoing but agreed to settle the collateral protection insurance class action lawsuit to avoid the cost and risk associated with a trial.

Class members will receive a cash payment that is equal to their proportional share of the amount Sound Credit Union allegedly overcharged them for collateral protection insurance premiums, fees, and interest.

It is estimated class members will receive between a minimum payment of $10 and a maximum of $2,000.

The deadline for class members to exclude themselves from or object to the Sound Credit Union settlement is Aug. 29, 2022.

The final approval hearing will be held Sept. 16, 2022.

Eligible class members who do not opt out will be mailed a check after the settlement receives final approval. Those who need to update their address may do so on the settlement website or by contacting the settlement administrator.

No claim form is required for the Sound Credit Union settlement.

Who’s Eligible

Individuals may be entitled to a settlement payment if they: 

• Resided in Washington
• Financed a motor vehicle through Sound Credit Union
• On or after Feb. 11, 2016, were charged more for (or as a result of) collateral protection insurance than they would have been charged had Sound Credit Union notified them of alleged deficiencies in insurance coverage, used a pro rata refund message, not charged an administrative fee, or not received an administrative reimbursement from the collateral protection insurance carrier or third-party collateral protection insurance administrator.

Potential Award

Up to $2000

Proof of Purchase

No proof of purchase applicable

Exclusion or Objection Deadline

08/29/2022

Case Name

Debra Fealy v. Sound Credit Union, Case No. 20-2-04853-0, in the Superior Court of the State of Washington, County of Pierce

Final Hearing

09/16/2022

Settlement Website

CPISettlement.com

Claims Administrator

Fealy v. Sound Credit Union
c/o Settlement Administrator
PO Box 23668
Jacksonville, FL 32241
888-267-0132

Class Counsel

Beth E Terrell
Adrienne D McEntee
TERRELL MARSHALL LAW GROUP PLLC

Walter M Smith
Steve E Dietrich
SMITH & DIETRICH LAW OFFICES PLLC

Defense Counsel

Kimberley Hanks McGair
Trish A Walsh
FARLEIGH WADA WITT