Consumer complaint received 2021-07-07
Company: PENTAGON FEDERAL CREDIT UNION
State: VA
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Fees or interest
Sub-issue: Problem with fees

Complaint:
PenFed is violating the Credit Card Act of XX/XX/XXXXand are in breach of the terms of their promotional advertisement for Balance Transfers at Zero percent interest for 12 months. 
Pursuant to the CCA of XX/XX/XXXX, no interest is to be charged if the entire balance is paid by the due date. Since the inception of my XXXX XXXX Visa, I have always paid for all of my purchases IN FULL BY THE DUE DATE which is the XXXX  of each month. 

In XX/XX/XXXX, I took advantage of PenFed 's promotional Balance Transfer where they clearly stated " no interest would be charged for 12 months. In this case, it was to expire on XX/XX/XXXX. However, PenFed began assessing interest to my credit card and/or my " deferred '' balance transfer in breach of the promotional. They have refused to credit my account even after speaking with their representative, stating that I would need to pay the balance in FULL including the deferred amount which is a part of the promotion. The closing date on my credit card is the XXXX  of each month and ALL CHARGES are paid in full with an extra amount towards the deferred balance transfer. PENFED 's Credit Card Agreement for BALANCE TRANSFERS and their credit card in general are both deceptive and ambiquous as it states as follows : " C. BALANCE TRANSFERS. ( 1 ) There is no grace period on balance transfers. Finance charges accrue on all regular or promotional balance transfer amounts from the date posted to your Account and continue so long as such amounts remain outstanding. ( 2 ) A finance charge will be imposed on the average daily balance of balance transfers, which is the sum of the balance transfers outstanding each day during the billing cycle, divided by the number of days in the billing cycle. The sum of balance transfers is determined by including new balance transfers and deducting any payments or credit and excluding any unpaid finance charge. A balance transfer appearing on the periodic statement is considered a part of the outstanding balance from the date of posting. ( 3 ) The amount of finance charge is calculated by multiplying the average daily balance for each balance transfer by its monthly periodic rate. The monthly periodic rate is the yearly interest rate divided by 12. If you transfer a balance from another financial institution to us, you will immediately incur finance charges at the regular or promotional APR available at the time of the balance transfer and on purchases at the purchase APR. For instance if you transfer {$1000.00} at a promotional rate of 0 % APR and then make a purchase of {$200.00}, you will immediately accrue finance charges at the purchase rate, forgoing the grace period. To avoid finance charges on new purchases after you transfer a balance, you must pay all balances on your Account including any balances that you transfer in full by the due date. '' Such wording, contradicts the Credit Card Act of XX/XX/XXXXas well as the promotionals they would offer. Such wording and documents violate consumer protections, related to interest rates and how they are calculated, fees, disclosures and marketing.

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