Consumer complaint received 2017-11-11
Company: NAVY FEDERAL CREDIT UNION
State: NV
Product: Vehicle loan or lease
Sub-product: Loan
Issue: Managing the loan or lease
Sub-issue: Problem with fees charged

Complaint:
I purchased a used XXXX XXXX XXXX XXXX Boat on XXXX XXXX, XXXX, with a loan from Navy Federal Credit Union for the amount of {$42000.00}. I was told over the phone when doing the loan application by the representatives multiple times and by people in the branch that this was going to be a straight amortized loan over 15 year with a fixed rate of interest. I made the first three payments on time no problem then I decided to prepay the 4th payment. After that my account informed me that there was no payment due for almost 60 days. I have attached paperwork that shows all of this. When I went to check the balance of the loan it had gone up to {$42000.00}. The last payment was made on XXXX/XXXX/XXXX and no further payment was due until XXXX/XXXX/XXXX which was the date Navy Federal told me to make the payment. Over {$1600.00} has been paid on the loan but only {$15.00} has gone to principle. When I realized this I couldnt believe it, I was literally getting XXXX and was beside myself. Based on their numbers there should have been a principle reduction of {$570.00}. This is not the case and at this point the loan appears to have grown because now there is more interest to pay down.. 

What I was told was this loan has a per diem interest of around {$9.00}, and if you prepay the loan the bank holds the money for the interest anyway so basically it can not be prepaid. Also they told me that if I wanted to Prepay that I had to do it right after the monthly payment was made. This was never disclosed to me and sounds like extortion with a prepayment penalty in disguise. This appears to be predatory lending practices, nowhere is it mentioned or was this mentioned to me. 

Navy Federal told me not to make a payment but went ahead and still charged me interest of around {$9.00} per day for almost 60 days. I found this out after I checked the balance of the loan. I called them and spoke to many different people because no one knew what they were talking about and kept telling me that this was a fixed straight amortized loan for 15 years. Finally someone told me that the loan was a " Consumer loan '' whatever that means, it was my first time hearing about that type of loan. Also no one at the branch in XXXX XXXX XXXX XXXX told me about that when I signed loan docs and picked up the check. The first time I heard about this was on XXXX/XXXX/XXXX. 

I called back on XXXX/XXXX/XXXX and spoke with a XXXX or supervisor after being stonewalled by everyone else I had talked to and again no one really knew what were saying or what they were talking about either. After explaining everything to the XXXX again about how no one had informed me about any of these terms she said she was So sorry and would talk to the her employees. Is this an admission of guilt? Just like that oh sorry we didnt tell you about the loan and were had been charging you interest daily.. Because when I asked her if there was anything that could be done she said Oh no, Im sorry but nothing can be done so again no help from anyone and being stonewalled again, she started to get a little snippy and get an attitude with me when I started to press her on these questions about the loan because she couldnt answer or give me a straight answers and many of her answers were Ums, sorry and silence. Talking with the bank has gotten me no where and is a waste of time, this is why Im turning to you for help because believe me if I had known about this I would have never picked up the checks and would have immediately canceled the loan. This is really ridiculous and is not stated in the note, which again is attached. 

The name Navy Federal Credit Union really fooled me, I thought they would be helping out people from the armed services but are really taking advantage of these people because many of them lack the proper knowledge about lending. I personally know military people who have these types of loans who are really being taken advantage of. This needs to stop right now.

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