Consumer complaint received 2015-04-17
Company: NAVY FEDERAL CREDIT UNION
State: PA
Product: Consumer Loan
Sub-product: Vehicle loan
Issue: Managing the loan or lease

Complaint:
In XXXX XXXX, I purchased my first vehicle after graduating college in XXXX XXXX with a XXXX. It was a XXXX XXXX XXXX XXXX Ford Fusion that I had custom ordered. Originally I financed the vehicle through XXXX XXXX XXXX XXXX. Later I discovered an opportunity to not only save with a lower interest rate, but to also move my auto loan to a credit union I recently joined ( XXXX XXXX ) and had very high expectations for. In XXXX XXXX, I refinanced my new vehicle with the Navy Federal Credit Union. 
Unfortunately, five months later the car was struck by someone having a XXXX on the highway after I left work and was totaled. The day after the accident, after I filed a claim with my insurance, I called NFCU to inform them that the vehicle was totaled. The NFCU rep continuously asked about GAP Insurance during the called and stated that I would be responsible for any balance the insurance did not cover if I did n't have GAP insurance. I was flabbergasted. Firstly, I did n't know what GAP insurance was. Secondly, I did n't have GAP insurance. Thirdly, I was baffled that a financial institution could legally force a consumer to make payments on a vehicle that was totaled after already receiving the cash value of the vehicle from the insurance, even if the accident was at no fault of the consumer. I made every payment on time, often paying early and much more than the minimum payment. So I could n't comprehend still owing a balance on the loan after the insurance paid for the vehicle. 
After negotiating a settlement about with my insurance for months and keeping the loan in good standing during the process, XXXX was ready to make payment. However, NFCU was not in a position to receive payment as NFCU did not add themselves as a lien holder on the title after they received it nor did NFCU notify me of this situation. NFCU representative continuously made excuses for the cause of the title not being handled properly then later threaten to send the account to collections after I refused to make additional payment on the loan once XXXX was ready to make payment. NFCU did not follow their own SOP and failed to notify me that action was needed once they received the title. This failure from NFCU to follow procedure caused a delay in payment from XXXX. Since NFCU was the cause of the delay of payment the account should have been considered in good standing until NFCU corrected their error. 
Subsequently, after a month the situation was rectified and XXXX made payment to NFCU. The remaining balance on the loan was {$2800.00} with repayment term of 1.99 % for 67 months. I was still dejected about paying for a vehicle that was totaled in a no-fault accident, but I accepted the situation and was willing to continue making payments for the remainder of the loan. I expected to make a reasonable monthly payment through the life of the loan. However I was again astonished by NFCU 's attempt to change the term of the loan and force an early payoff. NFCU is demanding a monthly payment of {$480.00} or that I take out a personal loan at around 10 % APR to pay off the loan ASAP. 
In summary, my XXXX complaints with NFCU are as follows : 1. NFCU did not provide sufficient information about the risk involved to make an informed decision about GAP insurance. GAP insurance was offered one time during the application process, along with other add-ons, and not offered again after approval. 
2. NFCU refused to admit fault in delaying settlement payment by not properly following procedure to have NFCU added as a lien holder on the title. 
3. NFCU is attempting to change the terms of the consumer loan, by demanding a much higher than minimum payment and ultimately demanding an early payoff. 
Overall, I joined the NFCU to be a member of a credit union that behaved differently from the big banks but have been sadly disappointed by the behavior and actions of NFCU

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