• Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Contact Us
  • Sponsor An Email
  • Post A Job
  • Merger & Acquisition Services

Agency Checklists

Massachusetts Insurance News & Job Opportunities

You are here: Home / Latest News / GM Financial Will Pay Over $1.8 Million For GAP Coverage Refunds and Loan Violations

GM Financial Will Pay Over $1.8 Million For GAP Coverage Refunds and Loan Violations

March 15, 2022 by AC Editor

More Than 2,000 Massachusetts Consumers May Be Eligible for Restitution

In response to claims that it had violated Massachusetts consumer protection laws, the automobile financing company, GM Financial has entered into an assurance of discontinuance with the Attorney General agreeing to pay more than $1.8 million to resolve allegations concerning refund practices for its Guaranteed Asset Protection (GAP) enrollment fees and its notices on some auto repossessions. Headquartered in Fort Worth, Texas, GM Financial is the trade name for Americredit Financial Services, Inc., an automobile financing company that General Motors bought in 2010. GM Financial, in addition to financing automobile purchases for automobile dealers, also offers GAP coverages for vehicles sold or leased through automobile dealers.

Per GM Financial’s website, its AmeriPlus GAP program provides protection for a dealership’s customers stating that “If a total loss occurs, AmeriPlus GAP will pay the difference between the actual cash value of the vehicle and the current outstanding balance on the customer’s loan or lease.”


The Attorney General’s claims against GM Financial resolved in the assurance of discontinuance

As outlined in the assurance of discontinuance, filed in Suffolk Superior Court, the case against GM Financial focused on allegations that it had failed to pay legally-required interest to consumers after delays in providing refunds of Guaranteed Asset Protection (GAP) enrollment fees. The Attorney General’s Office also alleged that GM Financial allegedly failed to provide sufficient information to certain consumers after repossessing their vehicles.

In particular, the assurance of discontinuance alleged that GM Financial “…failed to refund to certain consumers interest on unearned premiums on guaranteed asset protection (“GAP”) contracts, as required M.G.L. c. 140D §22.” Under this statute, a creditor, such as GM Financial, “who does not make a good faith effort to refund the credit balance, as required…., shall pay to the customer interest thereon at the annual percentage rate of 18%.”


A mutually agreed trustee will administer the restitution from GM Financial’s payment

Per the assurance of discontinuance, GM Financial had to pay within days to pay $1,849,182 to an independent trust for purposes of (i) making payments to provide relief for eligible customers, (ii) paying costs of implementation, and (iii) paying the Attorney General’s costs of investigation. The independent trustee to oversee the trust is to be mutually agreed upon by the Attorney General’s Office and GM Financial.


Attorney General’s statement on the assurance of discontinuance

“We alleged that GM Financial failed to provide borrowers with needed information, and failed to pay interest that legally belonged to those consumers,” said AG Healey. “We hope this settlement provides relief to the thousands of borrowers who have been affected by GM Financial’s alleged actions.”

The Attorney General’s Office in announcing the settlement estimated that “More than 2,000 Massachusetts residents across the state may be eligible for restitution under the settlement.”


The Attorney General’s team that negotiated the assurance of discontinuance with GM Financial

Th GM Financial case was handled by Assistant Attorney General Michael Sugar, Mathematician Burt Feinberg, and Legal Analyst Maggie Wallace of the Attorney General’s Insurance & Financial Services Division.

Print Friendly, PDF & Email

Filed Under: Latest News, MA Insurance Law | Insurance Fraud Tagged With: Agency Checklists, insurance fraud Massachusetts, Mass. Insurance News, massachusetts insurance news, New England Insurance News

Primary Sidebar

Sponsored

Sponsored

MA Division of Insurance Announcements

Latest Agency Sales

Kaplansky Insurance Acquires Seekonk’s Crosstown Insurance

Aronson Insurance Acquires LJM Insurance Agency

More Agency Sales

Career News

Massachusetts and Rhode Island FAIR Plans’ President and Chief Executive Officer Announces His Retirement

Massachusetts and Rhode Island FAIR Plans’ President and Chief Executive Officer Announces His Retirement

A Slideshow Of Mr. Bellotti’s 100th Birthday Celebration

Two Vermonters Voted as Top Captive Insurance Professionals in the World

Phil Shepard Hired as Surety Territory Manager of FCCI Insurance

Renaissance Appoints Clyde Ebanks Senior Vice President/Carrier Partnerships

Agency Checklists, MA Insurance News, Mass. Insurance News

ShoreOne strengthens leadership team with experienced Massachusetts Territory Manager

Herbert H. Landy Insurance Agency Hires Stephanie McNamara, AAI, AIS

Pauline E. Ashworth Joins Preferred Mutual as Executive Vice President, Chief Human Resources Officer and Diversity and Inclusion Officer

Vermont Mutual Insurance Group Adds Two New Board Members

MassDrive’s Jean-Marie Lovett Named One of Travelers’s 2023 Personal Insurance Agents of the Year Award

View More Career News

In Memoriam

In Memoriam: Robert J. Dowling – A Lifelong Commitment to Insurance and Community

In Memoriam: Hugh Campbell Findlay, 1928-2023

In Memoriam: John C. Cross, 1954-2023

CAR News

Regional Gaps in Auto Insurance Prices “Not Equitable or Fair,” Lawmaker Says

2nd Look 2023: The MA Commercial Auto Insurance Marketplace

2nd CAR Update 2023: The MA Private Passenger Auto Insurance Marketplace

View More CAR News

Massachusetts Law Updates

The JMA v. Zurich Appeals Court Ruling: A Warning Against Insurers’ Delayed Payment of Insureds’ Legal Fees”

Appeals Case Revisits Underlying Lawsuit Involving Zurich Insurance Duty to Defend Dispute.

Appeals Court Decision Reopens Door To Lawsuit Against New Bedford-Based Insurance Agency

A New Bedford-based agency may end up having to face a lawsuit it thought it might have avoided.

Understanding The Duty to Defend: Partington Builders v. Nautilus Ins.

Understanding The Duty to Defend: Partington Builders v. Nautilus Ins.

Federal Court Reaffirms Massachusetts Rule Regarding an Insurer’s Duty to Defend

Appeals Court Reins in Superior Court’s Expansion of Risk Management

Court Limits Indemnity Agreements Interpretation and Reverses $237K Legal Fee Award

More Mass. Law Updates

DOI News

MA Homeowners’ Insurance Premiums Topped $2.8B in 2021

Massachusetts Remains The 14th Largest Insurance Marketplace As Ranked By Total Premium Volume

Facts & Figures For New England Insurance Departments & Insurance Producers | 2023

Massachusetts Insurance Commissioner Honored for Exceptional Leadership

View More DOI News

Insurance Fraud

Staged Accidents Bring 2.5-Year Sentence In $300,000 Luxury Car Insurance Scam

Investment Adviser & Affiliated Insurance Agency Trigger SEC Disgorgement Lawsuit Over Undisclosed Commissions

Temporary Employment Agency Owner Indicted for Tax and Insurance Fraud

Six-Day Jury Trial: Property Owner Not Guilty Of Insurance Arson

More Insurance Fraud News

Footer

Agency Checklists

Contact us

Advertise on Agency Checklists

We offer a variety of ways to get help promote your company or product.

Announcements
Email Sponsorships
Partnerships
Custom Collaborations

*Affiliate Disclosure

Please note that any of Agency Checklists’ articles might contain one or more affiliate links. This means that any subsequent purchase resulting from these links may result in a commission for us, but at no additional cost to you. For example, as an Amazon Associate, Agency Checklists earns a commission from all qualifying purchases. By working with affiliates we can continue to keep Agency Checklists subscription free. Thank you for your support.

SEARCH OUR SITE

Explore Our Archives

Copyright © 2023 · Agency Checklists · All rights reserved.