Consumer complaint received 2022-04-21
Company: NAVY FEDERAL CREDIT UNION
State: VA
Product: Debt collection
Sub-product: Other debt
Issue: Written notification about debt
Sub-issue: Notification didn't disclose it was an attempt to collect a debt

Complaint:
My Navy Federal Credit Union account was overdrawn when the childcare tax credits were being issued earlier this year. Navy Federal took it upon themselves to add money to our account to make our balance positive before the credit was added. They were not given permission to do this, and in fact when they did this for an earlier stimulus check that was distributed, we contacted the bank and asked them to stop doing this. They refunded us for money that was deducted from our account to cover the cost of the money that had been added without our permission. After this first incident, our further requests to stop this " service '' were ignored and Navy Federal continued to do this every time that a child care credit was issued. Over the course of a few months, a total of {$2100.00} was added to our account without our permission. The bank was contacted on several occasions to request that the additional funds not be added. On XX/XX/2022, a lump sum of {$2100.00} was deducted from our checking account leaving us with a balance of - {$2300.00}. When I contacted Navy Federal to discuss this deduction, I was told that a letter was sent out letting us know that this would be happening. We never received a letter. I asked if the letter was sent certified mail and required a signature, and I was told that it did not. I question if this letter was ever sent out. If it was, I never received it. I also asked if they had any record of us requesting that the funds not be added to our account, and of course, there was no record. How convenient. Additionally, I asked if Navy Federal was asking permission before adding money to customer accounts and they said that this was a " favor '' that the bank was extending to its customers without first receiving permission. I was told by the representative that the only thing the bank could do was transfer the negative balance to our savings account and give us 60 days to repay the amount. I told them that it would not be possible and asked for an extension. They told me that this was not possible. When I asked to speak with upper management, I was denied. How is it legal for a bank to add and deduct money from a client 's account without first receiving permission? A document should have been sent out prior to the money being added asking costumers if they wanted to take advantage of this " favor '' from the bank. From what I understand, XXXX XXXX got into huge trouble for engaging in the same practice. In addition to filing this complaint, I have contacted the BBB, a lawyer and a local news affiliate. I do not believe that what they have done is legal. How this program was meant to benefit people is beyond my understanding. The reason that Navy Federal felt that they were justified in adding money to our account is because it was overdrawn - how do they possibly think that we would be able to repay the money in one lump sum and still manage to pay our other bills? We have an overdraft limit of {$500.00} - we have never been able to go beyond this amount, yet Navy Federal was able to overdraft our account by over {$2000.00}. It seems rather incongruous and quite frankly, illegal.

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