Consumer complaint received 2020-08-01
Company: NAVY FEDERAL CREDIT UNION
State: DC
Product: Vehicle loan or lease
Sub-product: Loan
Issue: Getting a loan or lease
Sub-issue: Confusing or misleading advertising or marketing

Complaint:
I originally financed my vehicle with Navy Federal Credit Union and was looking to trade in the vehicle for another one. I made a preapproval loan application with Navy Federal around XX/XX/XXXX and was approved a vehicle loan. At the time, I had not found a vehicle, so I had not collected the preapproval check from the branch. 
Approximately a month later, around XXXX XXXX, I had identified a vehicle and had called Navy Federal to see if my preapproval check was still available for pick up. The phone representative told me that it was. I went that evening to the branch located at XXXX XXXX XXXX XXXX, XXXX, VA XXXX. When arriving, I assisted by XXXX. He went over the preliminary loan information, such as how to complete the preapproval check and what the dealership needed to do once I provided them with the check. During this conversation, I noticed that the check was for approximately {$25000.00}, rather than the approximately {$38000.00} I was initially approved. 
I asked XXXX about the different amounts, and he attempted to explain the institution 's practices and reasonings for the deduced required amount. XXXX told me, that because my original loan was with Navy Federal, the bank would " pay itself first, '' then apply the trade-in value  to my existing loan, which would leave me with a balance. I did not fully understand and continued to ask clarifying questions. XXXX said, " I know. I work here, and it confuses me. '' He said, if I needed a little more, I would call Navy Federal to ask for another check. After that, I left the bank with the check.

A few days later, after researching the internet for more information, I called Navy Federal 's XXXX number and spoke to a vehicle loan specialist to ask additional questions. In this conversation, the representative provided me with similar and contrasting information. The similarity in information was that my trade-in value would be applied to my existing loan with Navy Federal. The contrasting information was concerning interest rates. The representative stated that they could not provide me with that information without knowing the miles and year of the new vehicle.

Using the information provided, I negotiated pricing for my new vehicle. Once I had settled on a price for the vehicle, I called Navy Federal XXXX number again to inquire about the interest rate based on the information that the previous representative told me they would need. During this call, the loan representative told me that my interest rate would be determined based on my credit. This was confusing because I had had the check to submit to the dealership. It was my understanding that the issuances of the purchase check, meant that the lender had acknowledged creditworthiness. I explained this to the representative, to which she stated it would be based on vehicle information. I told her I had identified a specific vehicle and had the exact information they needed. 
The representative also read additional loan clauses and information they provide to customers, which was hard to follow and understand. I then asked more questions for her to clarify the confusing terms, and asked her to help me understand the information using existing figures ; she agreed. She said she would be more than happy to help me, because " She works there, and it was hard for her to understand because it is extremely confusing. '' She told me ( using approximate figures ), my existing loan with Navy Federal was {$13000.00}. The dealership offered {$9000.00} for my old vehicle. Navy Federal would use that amount and deduct it from my existing car loan, and the remainder of {$4500.00} would be applied to my new loan. Using figures made the process more understandable. More importantly, it gave me a false impression that I was making an informed financial decision. I contacted the dealership again to acquire final pricing, which did not appear as Navy Federal had explained it to me. So, I called Navy Federal to ask for assistance with verifying the accuracy of the dealership initially proposed final costs. The representative told me that the dealer 's numbers were incorrect and that I could ask them to call Navy Federal 's XXXX number for assistance. This is what I did, and the dealer sent me a second final cost sales sheet. 
It was determined that the cost of the new vehicle would be approximately {$28000.00}. However, the original check was only for {$25000.00}. Remembering what XXXX had initially told me, I contacted Navy Federal again to ask for an additional {$3000.00}. When I called the XXXX number to ask for the additional funds, the representative told me that I would need to complete another preapproval application. This was not aligned with what I was told I would need to do. However, I went through the process again with the representative because of consumer faith that I was receiving accurate information. While waiting for a decision on a " new '' preapproval, the representative went over " customary '' lender information about the process. This was completely contradictory to what I was previously told. During this call, she told me that my potentially monthly payment would be approximately {$600.00}. This was alarming because it was significantly higher than I thought to be true when I went over figures with another representative. So, I asked this representative questions or clarification, We also went over numbers, and she came up with the same figures as I had previously known to be true. Finally, she told me I was approved, and I could go to the branch to return the old check and obtain the new one {$28000.00}. This was the exact amount I needed. Based on all of the information I had received from Navy Federal 's loan officers in good faith, I was confident that I was trading in my old car to acquire a new one and that my loan would not be in excess of {$33000.00}. 
A week after I signed documentation for my new vehicle, I receive an email from Navy Federal stating that my new car loan was {$41000.00}. I did not feel comfortable with these figures and sent a message to outline what I was told my loan would total. A representative called me, XX/XX/XXXX with a COMPLETELY different explanation about the loan, although she also stated that the process was confusing to understand. The representative told me that I was still responsible for 100 % of my original loan and that the {$9000.00} received for my trade-in was merely a credit to reduce the cost of the new vehicle. If I was explicitly told this information BEFORE I signed documentations financially committing me to this new car, I would have NEVER used Navy Federal to finance my new vehicle, or better yet, would have NEVER traded in my old car. The vehicle that I purchased was used, and its blue book value is a little more than half of this deceptive loan I signed based on intentionally misrepresented information. 
Navy Federal has designed convoluted loan practices, that can not be explained with full confidence by its employees, to bamboozle and cripple consumers from making informed financial decisions deliberately. But, rather have knowledgeable engaged in loan practices that wrongfully entice consumers to agree to terms based on lies and deceit. Navy Federal and its loan officers were grossly negligent in its financial advice, despite my best effort to do due diligence on my part. Navy Federal Credit Union is liable for the inaccurate written and oral information that its loan officers have provided to me as a consumer. Navy Federal Credit Union and its representatives committed negligent misrepresentation and have breached its fiduciary duties to me as a consumer. Because of Navy Federal Credit Unions breach of goodwill, the institution has placed me in a position of credit ruins and financial hardship because of its convoluted vehicle loan practices and policies that are not fully understood by its employees. Yet, they are hired and entrusted to provide good-faith information to address consumer 's financial questions about its loan provided. Navy Federal Credit Union has willfully and fraudulently misled and handed my vehicle loan.

Company response to consumer: Closed with explanation