Kenty v. Bank One, Columbus, N.A.

Facts

Barbara Kenty and other class members entered into automobile loan agreements with Bank One that required them to maintain collision and comprehensive insurance coverage on their vehicles with a maximum deductible of two hundred fifty dollars. The loan agreements provided that if borrowers failed to obtain required insurance, Bank One could purchase limited insurance for the Bank’s protection and add the premiums to the loan balance. Each plaintiff failed to purchase the required insurance, and Bank One purchased force-placed insurance from Transamerica Premier Insurance Company. The policies purchased included not only coverage against loss or damage to the vehicles but also additional coverage protecting the Bank against borrower malfeasance, repossession expenses, storage costs, and other losses that could occur even when vehicles were repossessed in undamaged condition. Notices sent to plaintiffs stated that the insurance protected the interest of the lender in the vehicle but did not explain the additional coverage beyond loss and damage protection. The notices listed endorsements only by number without explanation. Bank One received rebates from Transamerica that were not disclosed to or passed on to the plaintiffs, who were charged the full premium amounts plus finance charges added to their loan balances.