Consumer complaint received 2022-07-07
Company: NAVY FEDERAL CREDIT UNION
State: WA
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Problem with a purchase shown on your statement
Sub-issue: Credit card company isn't resolving a dispute about a purchase on your statement

Complaint:
On XX/XX/XXXX, a total of {$3000.00} has been represented to the account ending in XXXX, and Navy Federal had purportedly claimed after a secondary review, there was no billing error was found. Despite XXXX XXXX had informed the undersigned that under the new rules issued in XXXX, Navy Federal should not send an inquiry ( Retrieval Request ) to the merchant, as the new rules issued in XXXX imposed a strict 120-day time frame, and two ( 2 ) dispute limit per transactions, the issuer no longer requires any evidence to issue an initial decision. Because XXXX XXXX acts as the card network and issuer in most transactions, theyll rarely think they have insufficient information to make an initial decision, the chargeback then will be filed, and the transaction amount is immediately removed from the merchants account. For the record, XXXX XXXX had informed the undersigned that Navy Federal as the issuer had only sent out one inquiry to the merchant via the XXXX XXXX network. If a chargeback was issued immediately after a dispute is filed, the merchant can represent the transaction within 20 days of the chargeback date by providing evidence against the claim or accepting the dispute. Because it was an inquiry instead of a chargeback, the cardholder will not be able to review the merchants written response. The cardholder had no choice but to accept the representment, even though Navy Federal never adhere to the XXXX XXXX chargeback rules and guidelines, as amended in XXXX. 

On XX/XX/XXXX, a payment of {$3000.00} has been reversed. Per records, on Wednesday, XX/XX/XXXX, a payment to Navy Federal has been scheduled with an estimated delivery date of XX/XX/XXXX : XX/XX/XXXX XXXX XXXX XXXX XXXX XXXX XXXXXX/XX/XXXX XXXX PM XXXX XXXXXXXX, OK ; XX/XX/XXXX XXXX PM XXXX XXXX, XXXX. Navy Federal had processed photocopies of this bill payment with the virtual number of XXXX from a Business Interest Checking account ending in XXXX in the amount of {$3000.00}. A payment hold has been placed on XX/XX/XXXX, and when funds are cleared, Navy Federal released the payment hold. To address this, the Check Clearing for the 21st Century Act ( Check 21 ), allows a financial institution to create and send a substitute check that is made from an electronic image of the original check. If a substitute check must be returned unpaid because of insufficient funds ( a dishonored or bounced check ), the paying bank endorses NSF ( non-sufficient funds ) as the reason for the return on the top-left corner. In this case, Navy Federal should reverse the payment and release the payment hold, encodes a " 5 '' as the EPC on the MICR line to identify the substitute check according to XXXX XXXX, along with the routing number of the depository financial institution and the dollar amount of the substitute check, because substitute check is just an image and will never be signed. In this case, Navy Federal should encode this information on a return strip, perforated strip, or carrier document that the financial institution attaches to the dishonored substitute check. The bank then returns the dishonored substitute check through the routing process, and Navy Federal will become the reconverting financial institution and send a legal copy to the undersigned. Ultimately, there is a 40-day time frame limit from the date your financial institution provided the substitute check or from the date of the statement that shows the problem, in this case, the legal copy has been officially accepted on XX/XX/XXXX, and now if the payment is being reversed on XX/XX/XXXX, it is 3 days outside of the 40-day time frame.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation