4 reasons a standardized cancellation and refund process is necessary

When purchasing a vehicle, consumers typically have the opportunity to add on additional products to their loan contract. These products are designed to help provide additional protections for the vehicle, particularly due to an unexpected event. Examples of these ancillary products can include:

• GAP
• Credit Life/Disability
• Vehicle Service Contracts
• Tire & Wheel Protection
• Maintenance Plans
• Weather Protections
• Theft and Vandalism Protection

Ensuring consumers benefit from the financial impact of refundable ancillary products continues to be a focus for regulatory bodies that oversee financial institutions. As a response, many lenders have changed, or are in the process of changing, how they handle ancillary product cancellations and obligatory refunds. This need for a change of process became particularly timely when a class action lawsuit was filed in Colorado this July against a number of lenders.

 

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