§ 5-9.3-106 — Cancellation of GAP agreement

Colorado § 5-9.3-106

• Jurisdiction: Colorado
• Title 05: Consumer
• Art.: Guaranteed Asset Protection Agreements

Text

(1) The original creditor must
refund to the consumer the unearned GAP fee paid pursuant to the GAP agreement
if:

(a) The finance agreement is prepaid prior to maturity or the motor vehicle is
no longer in the consumer's possession due to the creditor's lawful repossession
and disposition of the collateral; and

(b) The consumer has not made a claim under the GAP agreement.

(2) (a) If the GAP agreement is provided as a contractual term of the finance
agreement, any refund issued must be calculated using a pro rata method or any
other method approved by the administrator.

(b) If the GAP agreement is provided as insurance, any refund issued must be
calculated using a method authorized under applicable insurance statutes, rules, or
interpretations of the commissioner of insurance pursuant to title 10.

(3) (a) In the event that the consumer finance agreement has been assigned
to a person other than the original creditor, the assignee shall send notice to the
original creditor requesting, on behalf of the consumer, a refund of the unearned
GAP fee pursuant to the GAP agreement. Upon receipt of such notice from the
assignee, the original creditor shall provide the unearned GAP fee to the consumer
within thirty days.

(b) If the original creditor has not refunded the unearned GAP fee to the
consumer within thirty days pursuant to subsection (3)(a) of this section, the
assignee shall provide the refund to the consumer, and the original creditor or GAP
administrator shall reimburse the assignee for the amount of such refund no later
than forty-five days after the original creditor or GAP administrator has received
notice from the assignee.

(4) A cancellation fee of not more than twenty-five dollars may be charged
to a consumer if the consumer cancels the GAP agreement more than thirty days
after the effective date of the GAP agreement.

Legislative History

Source: L. 2023: Entire article added, (HB 23-1181), ch. 425, p. 2502, � 3, effective January 1, 2024.