Santander Faces Class-Action Over ‘Worthless’ GAP Coverage
A woman who says she was duped into purchasing “void and worthless” GAP coverage has filed a class action suit against the finance source on behalf of Illinois customers who have signed similar contracts.
CHICAGO — A woman who claims she was duped into buying “void and worthless” GAP coverage on a used vehicle has filed a class-action lawsuit against the company that financed the transaction.
Joyce Pettye filed a lawsuit against Santander Consumer USA on Aug. 31, alleging the finance source violated the Illinois Motor Vehicle Retail Installment Sales Act and the federal Truth in Lending Act (TILA) when it purchased a retail installment sales contract associated with a 2012 Ford Focus she purchased from Al Piemonte Super Car Outlet in Northlake, Ill.
According to the lawsuit, Pettye was presented with a stack of documents related to her purchase and was instructed by dealership personnel to sign on the lines marked by the letter “X.” Among those documents was a contract for GAP coverage that cost $895, and was limited to purchases with a maximum APR of 24%. However, the APR on Pettye’s contract was 27.06%, rendering the GAP coverage “void and worthless, pursuant to its own terms,” according to the compliant.
Pettye also alleged that she was not presented with a copy of the disclosures required by the TILA “in a form she could keep” or told that she was making an additional purchase when she signed the GAP contract. In fact, according to the compliant, Pettye was “completely unaware that she had signed the [GAP contract], or that such signature represented an additional ‘non-required’ purchase.”
The lawsuit was filed as a class action on behalf of Illinois customers who signed a similar GAP contract that was void because their APR was also in excess of the coverage’s maximum APR limit.
“…The ‘Maximum APR’ for the ‘GAP Program’ at issue is not determined on an applicant-specific basis,” the complaint read, in part. “And a form addendum for the purchase of GAP protection reflecting a maximum APR was used in most or all of the automobile purchases, on credit, that include the purchase of such GAP protection.”
The suit seeks damages in an amount to be determined at trial and the return of finance charges improperly collected by Santander.
More F&I
Smaller Loans, Longer Terms
The youngest generation of car buyers is more likely to finance less expensive vehicles, more than half of generation Z consumers borrowing less than $25,000.
Read More →
New Lifetime Battery F&I Product Meant to Drive Dealer Traffic
EFG Cos. offering is intended to create lifetime auto dealer engagement with customers.
Read More →
The Psychology Behind Menus That Increase Add-On Sales
There is a science to crafting a menu that gives customers confidence in the choices presented, and moving the process outside the F&I office can further boost results.
Read More →
Why Your F&I PVR Is Misleading You
Here’s a handy checklist of the numbers to track in 2026 instead.
Read More →
Auto Consumer Anxiety Presents Opportunity
A survey of U.S. drivers found the majority are concerned about finances and the economy, but those fears make many ready to buy vehicle-protection products.
Read More →
Humble and Hungry: 12 Rules for an F&I Life
Dustin Gingerich, with a decade in the F&I business under his belt, shares his thoughts on leadership, building trust with customers, and the importance of learning and innovation.
Read More →
Focus on the Opening
F&I managers must learn as much as possible about their customers, starting before they walk into their offices. The bulk of today’s consumers expect that, and good results will follow.
Read More →
F&I Reaches for the Sky
The increasingly important profit center continued making gains in the first quarter, according to StoneEagle data, ancillary products proving more popular as consumers hold onto their buys longer.
Read More →
What Market Timing Mistakes Mean for Your Reinsurance Program
When volatility hits, dealer-owned reinsurance programs face a familiar temptation: pull back and wait for calmer waters. New data from BOK Financial shows why that instinct can quietly cost you years of surplus growth.
Read More →
The 90/10 Rule
In this video, Ryan Ruff explains the rule that elite sales professionals use to turn ordinary conversations into unforgettable customer experiences.
Read More →