Consumer complaint received 2023-12-04
Company: NAVY FEDERAL CREDIT UNION
State: CA
Product: Checking or savings account
Sub-product: Savings account
Issue: Problem caused by your funds being low
Sub-issue: Overdrafts and overdraft fees

Complaint:
I filed complaint with XXXX against 2 sellers for two different purchases that I didnt receive. After trying to contact these sellers on a number of occasions to rectify issue XXXX stepped in. I also notified navy federal a week later as an extra percaution. On XX/XX/XXXX, I received 2 mails from navy federal regarding two charges. One of the charges was in the amount of {$900.00} and the other was for {$830.00}. Navy federal stated that they were issuing me a temporary credit for {$830.00} for one charge disputed, and investigating the XXXX no temporary credit would be issued until after their investigation. I received email from XXXX that two disputes of items not received that I had filed with XXXX were adjudicated in my favor, resulting in both amounts being refunded back to my navy federal debit card. Subsequently, XXXX informed me of the refund for both complaints. However, Navy Federal credited only one of the refunds, amounting to {$830.00}, while there wasnt a temporary credit for the other charge totaling {$900.00} issued by navy federal. When they credit were applied back to my checking account, I was unaware of an outstanding debt of {$1000.00}, I discovered an overdraft in my account, prompting me to seek clarification. They said it was relating to the {$830.00} temporary credit i was given relating to dispute. I stated both credits were refunded by XXXX on the same day. They stated they will look into it. I requested to set up a payment arrangement to pay down the negative balance. The representative said I had 60 days to pay it but didnt set up a payment plan as I requested. 

Upon contacting Navy Federal on XX/XX/XXXX after seeing my SSI deposit was pending to my savings account..it showed a balance in my account of {$89.00} and a few cents that would be available rather than the full amount of the ssi deposit. The representative informed me it was in my savings and it wasnt applied to my checking over draft. I informed them that they cant use sis to pay a debt or garnish it to satisfy negative. I reiterating stating that, its not showing that I will have my full ssi benefit amount available. I also mentioned that It shows on my mobile app that youre taking my deposit to cover the {$1000.00} overdraft from XXXX, representative informed me that that wasnt going to happen. The next day I find that they had debited the full amount from my savings account without authorization or notification and applied it to negative checking account. Despite their assurance that my savings would remain untouched, they unilaterally transferred {$1000.00} from my savings to cover my checking account deficit. Notably, my attempt to make payment arrangements within the provided 60-day window was preempted by this unauthorized transfer.

Moreover, when inquiring about the status of my Social Security Income ( SSI ) funds, a supervisor acknowledged the deposit but revealed it was placed on hold. Despite assurances that the funds were secure in my savings account, Navy Federal surreptitiously utilized these funds to settle my debt without adhering to the requisite notification protocols.

HERE 'S THE LAW Compilation of the Social Security Laws Sec. 207. [ 42 U.S.C. 407 ] ( a ) The right of any person to any future payment under this title shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.

( b ) No other provision of law, enacted before, on, or after the date of the enactment of this section [ 126 ], may be construed to limit, supersede, or otherwise modify the provisions of this section except to the extent that it does so by express reference to this section NAVY FEDERAL SHOWS ... A 'PATTERN OF PRACTICE ' Violation of FDCPA Relevant Law : FDCPA ( 15 U.S.C. 1692 et seq. ) Potential Violation : Various provisions, including Sections 1692d, 1692e, and 1692f.

Explanation : Defendant 's actions constitute FDCPA violations, encompassing deceptive, misleading, and unfair practices in debt collection.

The provisions of section 207 ( a ) of the Act ( 42 U.S.C. 407 ( a ), prohibiting attachment of benefits, are specifically made applicable to Supplemental Security Income ( SSI ) benefits pursuant to section 1631 ( d ) ( 1 ) of the Act ( 42 U.S.C. 1383 ( d ) ). Federal regulations at 5 CFR 581.104 ( j ) also specify that SSI benefits are not subject to garnishment.

Potential Violation : Sections 1692 ( b ) and other relevant provisions, in conjunction with constitutional due process rights. It is essential to highlight that during the account setup, I explicitly declined the option to link my savings and checking accounts. This decision was made clear to Navy Federal representatives. Nevertheless, they violated this preference and moved funds from my savings to checking, contrary to my explicit instructions.

This unilateral action, without proper notification or adherence to established protocols, constitutes a violation of my rights, especially regarding the use of SSI funds. Navy Federal 's actions are inconsistent with the treatment prescribed for Supplemental Security Income recipients, who are entitled to receive prior notification before any garnishment.

In summary, Navy Federal 's unauthorized transfer of funds from my savings account, the lack of notification, and the contravention of established preferences represent a serious violation of banking protocols and infringe upon my rights as an account holder.

Footnote : CFPB Orders Navy Federal Credit Union to Pay {$28.00} XXXX for Improper Debt Collection Actions. 
https : XXXX

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