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FDAzar > Wells Fargo Gap Policies

Wells Fargo GAP Policies

Guaranteed Asset Protection, also referred to as Guaranteed Automobile Protection or GAP, is a debt cancellation service that Wells Fargo provides to customers who finance automobile loans through Wells Fargo. Under this service, Wells Fargo agrees to cancel the remaining loan balance when the customer’s automobile is totaled (damaged beyond repair or stolen and never recovered) and the insurance payout does not cover the outstanding balance on the loan. In other words, Wells Fargo agrees to forgive any “gap” between the amount the insurance company pays out and the amount outstanding on the loan.

Because the GAP fees are prepaid upfront for the entire term of the underlying loan, if the underlying loan is paid off or otherwise terminated early, or if the customer cancels the GAP before the end of the loan term, then Wells Fargo is contractually and legally required to refund the unused and unearned portion of the GAP fees on a pro-rata basis.

If you financed the purchase or lease of a vehicle with Wells Fargo and your loan included GAP coverage, you may be entitled to damages. If you have not received a refund from Wells Fargo for the unused portion of your GAP coverage, you may be a potential class member in the pending class action lawsuit against Wells Fargo, case no. 8:18-cv-0032. If you believe you are potential class member and may be entitled to damages, Contact FDAzar.


Recently, Wells Fargo has aggressively incentivized automobile dealers across the country to put pressure on borrowers to purchase GAP. If a customer signs up for GAP, the customer is required prepay upfront the GAP fees for the entire term of the underlying loan in one lump sum payment.

If the customer cancels the GAP before the end of the loan term, or if the GAP is effectively cancelled because the underlying loan is terminated or the vehicle is repossessed prior to the end of the loan term, Wells Fargo is contractually and legally required to refund the unused and unearned portion of the GAP fees to the customer on a pro-rata basis.

Despite these requirements, Wells Fargo systematically fails to refund unearned GAP fees when there is an early termination of the underlying loan or repossession of the vehicle. Instead of refunding the unearned GAP fees or at least notifying consumers they are entitled to a refund, Wells Fargo sits back and keeps the funds for itself knowing full well that consumers are usually unaware or forget they are entitled to refund of the unused portion of their prepaid GAP fees when they have paid off their loan early or had their vehicle repossessed. Wells Fargo has admitted their wrongdoing in this case and has a proven track record of failing their customers. See the New York Times article “Fargo, Awash in Scandal, Faces Violations Over Car Insurance Refunds

Working in concert with other class action law firms, FDAzar filed a class action lawsuit against Wells Fargo on February 27, 2018. Rather than moving to dismiss the case, Defendants filed an answer to Plaintiffs’ complaint on June 13, 2018. Currently, the parties are preparing to conduct discovery and to eventually file for class certification in front of the Honorable Andrew J. Guilford in the United States District Court for the Central District of California.

FDAzar’s Class Action Experience

Franklin D. Azar & Associates is well known in the class action community. For over 30 years, our attorneys have protected the rights of individuals who have been taken advantage of by big corporations and during that time, has secured over $1.5 billion in compensation – including over $750 million from Walmart in a wage and hour dispute that spanned approximately 26 states. FDAzar has been and is involved in mass tort and class actions against other large corporations like Toyota, Hewlett Packard, British Petroleum, drug manufacturers, medical device manufacturers, and 401k providers. Our class action department is staffed with experienced and knowledgeable attorneys who focus on litigating large, complex cases.

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