Consumer complaint received 2021-11-10
Company: PENTAGON FEDERAL CREDIT UNION
State: GA
Product: Vehicle loan or lease
Sub-product: Loan
Issue: Getting a loan or lease
Sub-issue: Fraudulent loan

Complaint:
I was shopping for auto loans in XX/XX/2021 to purchase a used vehicle. I completed an application with Pentagon Federal in XXXX to see what the interest rate would be, but ended up going with another lender ( where I purchased the vehicle ) as it offered a better rate. I did not reply to any further correspondence for months after I saw the loan offer. It is important for context that in order to even express interest in an auto loan with Pentagon Federal, they require that you create a checking/savings account with their credit union and put in {$5.00} ( in order to add {$5.00}, you have to link a checking account to push funds into the account- this is important in how the scam was done ). 


Little did I know, that PenFed then proceeded to open an auto loan account, and at some point sent me a " check '' within the dozens of letters they sent to my house following. They sent lots promotional ads as well during this time ( life insurance, home mortgage, etc. ), so I just cut everything up and threw everything away believing I was just on their mailing list. 

What I did not realize was, they then granted themselves permission to pull money from the personal checking account I used to add {$5.00} to PenFed savings account ( which was required to inquire about an auto loan ) for months to pay this " auto loan. '' I finally caught wind of it in XXXX 2021, after they had already paid themselves nearly {$900.00}. I have called their customer support numerous times to resolve. They agreed multiple times that they did not have any of the documentation needed to authorize a loan, and did not have permission to auto-pay themselves from the account tied to my Pentagon Federal checking account.

In their effort to resolve this, they claim to have cancelled the loan, and reversed payment on the loan itself to refund me. Now, after they reversed the payments, they then reported me to the credit bureaus for being 90 days late on my " loan. '' My credit score is now tanked to the low 600s. 

I have called PenFed at least 7 times to resolve. They have agreed that they do not have documentation on file needed to establish an auto loan with me, or the authorize using my checking account to auto-pay this loan. Every time they say they are resolving it, they make it worse. I have tried to be patient but this " loan '' was enacted under false pretenses, I never signed a Promissory Note or used the funds from the check they allegedly sent, or provided any vehicle information to insinuate I would be borrowing money from their institution to purchase a particular vehicle. They have even gone as far as increasing my rates on this loan now for still not providing vehicle and insurance info. 

I am without options and feel at the mercy of fraudulent business practices. I would like to report so others do not go through this via PenFed and to establish a case of fraud as I dispute the impact this loan has had on my credit history. I will also be reporting to NCUA. Unfortunate that NCUA directly charters PenFed who allows this sort of malpractice to occur.

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 non-monetary relief