Consumer complaint received 2018-03-26
Company: ALLY FINANCIAL INC.
State: AZ
Product: Vehicle loan or lease
Sub-product: Loan
Issue: Problems at the end of the loan or lease
Sub-issue: Problem with paying off the loan

Complaint:
I purchased a XXXX XXXX XXXX on XX/XX/XXXX from XXXX XXXX, and as part of my purchase contract, I purchased a GAP Insurance Policy from XXXX XXXX XXXX XXXX, which I was told would cover any deficit if my vehicle insurance did not pay off my auto loan after a loss. Having doubts about the payment date I was obligating to on my purchase contract, I requested a different payment date. I was informed by the Finance Manager at this dealership that it could easily be changed with whichever Lender picked up the contract, no problem at all. No mention was made of any negative impact that this would have on my loan and other contracts, and after having spent several hours completing this purchase at the dealership, I took my new car and went home.

I soon was advised that my contract had been financed by Ally Financial, and that my loan number was # XXXX. I immediately made arrangements for ACH payments. Several months later, I asked Ally to change my payment date, and they cheerfully accommodated my request. I had to pay a pro-rated payment to carry me over to the new payment date, and happily did so. No mention was made of any negative impact that this change would have on my GAP Insurance that was included in the purchase contract. I continued making payment via ACH, and never incurred a late fee.

On XX/XX/XXXX, I was in an accident in my XXXX, and the car was declared a total loss. As my insurance company did not pay off the entire balance, I filed a claim with the GAP Insurance provider, XXXX XXXX XXXX XXXX under my contract # XXXX. After many weeks of repeatedly faxing the same documents to XXXX XXXX XXXX XXXX that they requested in order to process my claim, XXXX XXXX XXXX  finally sent ALLY a check in the amount of {$2000.00}, leaving an unpaid balance ( per XXXX XXXX XXXX XXXX ) of {$94.00}.

I was confused as to why the loan wasnt paid off in full, and the GAP Department explained to me that they pay based only on the original contract dates, and that any payment not made on the exact due date is considered LATE and that every payment, indeed, was considered by XXXX XXXX XXXX XXXX to have been made late. The pro-rated payment made to Ally when I requested a payment date, was considered by XXXX XXXX XXXX to have been a breach of my contract, and therefore they had adjusted the amount they would pay on my behalf, leaving a balance of {$94.00}. As far as I knew, I had never been late, and was shocked. Nobody, at any time during the sale or term and servicing of this contract, let me know that I was required to make every payment on this loan exactly on the original contract due date, and that any variation from that pattern would decrease the amount paid on any GAP claim.

This problem is further compounded by the fact that ALLY is now trying to collect about {$2000.00} from me to pay off the XXXX. I dont have any explanation as to how the amount increased from {$94.00} to {$2000.00}, and I requested arbitration to get this figured out.

I believe this falls under the UDAAP laws because : XXXX XXXX did not disclose that I would need to make payment on or before the specific original payment date in order not to be in violation of the GAP Insurance contract XXXX XXXX  advised me that it was acceptable and normal practice to change the payment date with the vehicle finance company and again did not disclose this would cause a decrease in payment made against the GAP Insurance policy that XXXX XXXX sold to me.

XXXX XXXX XXXX XXXX took unfair advantage of my ignorance of their requirements, and that there was no way to comply with their terms without the loan payment requirements having been fully disclosed to me.

Ally Financial allowed me to make a change to my payment date without disclosing to me that this would further impact my ability to collect on a GAP Claim that was part of their financing.

Ally Financial failed to apply insurance payments to my loan effective on the date of loss ( both from XXXX  Insurance and XXXX XXXX XXXX XXXX ) thereby inflating the payoff from {$94.00} to close to {$2000.00}.

Although all my payments were made in a timely manner, Ally Financial is now reporting me as delinquent on the inflated balance, and are dunning me for payments in the amount of {$420.00} ( which I can not afford to pay, as I had to purchase another used car after the XXXX was totaled ).

The biggest problem is that the terms of the financed GAP Insurance were not disclosed, and that the claim does not have to pay off the loan entirely if you did not meet these terms. Usually, a consumer is not required to make every payment on the exact due date, there is a grace period. And I had no idea that changing the due date would further impact the claim.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation