Consumer complaint received 2018-03-14
Company: PENTAGON FEDERAL CREDIT UNION
State: IL
Product: Vehicle loan or lease
Sub-product: Loan
Issue: Getting a loan or lease
Sub-issue: Confusing or misleading advertising or marketing

Complaint:
In XX/XX/XXXX, I applied for an auto loan with XXXX. I applied for a {$15000.00}, for 36 months, with a rate of 1.99 %. XXXX   advertised the loan stating as no finance charges included so, I expected the APR to also be 1.99 %. Prior to receiving the disclosures for this loan application and approval, I decided that I wanted a larger loan amount, and I reapplied for a {$20000.00} loan, for 48 months, and the APR would be 2.99 %. In order to receive the best interest rate, I took advantage for the XXXX Car Buying service which guarantees additional reduction in the APR of the loan, plus assist you with the purchase price by submitting your application via the XXXX XXXX XXXX tool. I waited for the disclosures and they never came by mail or on the website. I called the institution to inquire about the disclosures for the new loan application that I applied for six days earlier and they finally sent them. 

Once I received the disclosures for the second loan for {$20000.00} I notice that the stated APR was indeed 2.99, put I was surprised to see a finance charge of about {$1000.00}. I called XXXX  to inquire about this discrepancy and the representative first stated the disclosed APR was correct. I explained to her that it was impossible for a {$20000.00}, with a term of 4 years, and a payment of {$440.00} to have an APR of XXXX if the was a finance are of $ 1000+. In fact, the APR would be about 5.584 %. I told her that she needed to send the correct disclosures without the finance charges added because she continued to state that XXXX did not charge finance charges. I further explained, that not only was I a federal employee, but I also work in the banking industry and I understood how to calculate APR correctly. ( I did not tell them where I worked, but once they pulled my credit, my employers name is listed ) The second set of documents did not have the finance charge included, but the disclosed APR stated it was just an estimate and it was higher than the previously disclosed APR. Once I found the car that I wanted, I called back and provided the vehicle identification number ( VIN ) so that XXXX  could lock in the interest rate. However, XXXX  would not send out new disclosures. I explained to the representative at the time that XXXX must send loan disclosures before I signed the check for the loan, so that I know exactly how much the loan was going to cost. Unfortunately, before this could happen, I found out that the car dealership did not actually the exact vehicle I wanted and so I did not purchase the car. 

I believe that I might have sent an email to the institution stating that I had issues with the disclosures they sent, and that they are required by law to send loan disclosure prior to loan consummation. I never heard back from them. 

Later in XX/XX/XXXX I decided to take advantage of the year-end car sales, and reapply for a car loan because it had been more the 90 days since the last application. I applied online, but my XX/XX/XXXX denied my application. I did not call the institution to inquire about the loan, because I did not have the time. 

On XX/XX/XXXX, I called the institution to inquire about the denial of my application. I explained to the representative, that no creditor had reported any derogatory information to my credit report and that my income had increased so I did not understand why they denied my application. She resubmitted my application and told me be they approved my application, but that my APR would be 5.99 %. I asked why my APR was more than 3 % higher than the previous two applications and the representative told me that the only loan program I qualify for [ now ], is a loan program in the secondary market. I want to know how the loan criteria changed so dramatically over the course of six months, especially is a situation in which my income has increase and my obligations have decreased. 

I believe thatXX/XX/XXXX is only offering me subprime loan programs because I previously complained about their erroneous disclosures and failure to disclose. I would like the CFPB to request all of my applications and the associated disclosures I have with XX/XX/XXXX since XX/XX/XXXX. Those disclosures will show that XX/XX/XXXXincorrectly disclosed the APR on all of the disclosures, except for one. Attached you will find a copy of one of the disclosures. You will find that the disclosed APR is incorrect, there is a finance charge included, and the payment amount is incorrect with respective to the amounts on the disclosure. The Executive Vice President, Chief Operating Officer is the person whose name appears on the disclosure.

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