Consumer complaint received 2023-02-11
Company: NAVY FEDERAL CREDIT UNION
State: SC
Product: Checking or savings account
Sub-product: Checking account
Issue: Problem with a lender or other company charging your account
Sub-issue: Transaction was not authorized

Complaint:
On XX/XX/2023 Navy Federal Credit Union took {$640.00} from my checking account. They claimed it was to pay off a debt owed to them. I asked a customer service supervisor named XXXX where in the contract it explicitly states they can transfer funds from my checking to savings account. He could not provide that information. He read a disclosure agreement for a secured credit card application. I had an unsecured credit card with Navy federal Credit Union which is an open-end credit plan under 15 USC 1602 ( j ) and 15 USC 1637 . 

I communicated with a woman named XXXX from the collections department of Navy Federal Credit Union on XX/XX/2023 and she was unable to state the exact contract agreement that states they are able to transfer funds from my checking account either. She stated I can make a payment arrangement and credited my account {$200.00} but still couldn't tell me the the agreement. She couldn't say why only {$200.00} and not the entire amount when I am specifically asking where does it state per contract you can take the funds from my contract. She constantly says she doesn't have a disclosure agreement in front of her and can not send one to me. 

XXXX transferred me to a credit card representative so they can provide a disclosure agreement. That representative was unable also to read the exact part that states they can transfer funds from my checking account to pay off a debt. He attempted to send via email but that sent me to an invalid link. 

So I communicated with a customer service representatives, credit card representatives and collations representative but no one has been able to validate this within the contract to transfer funds from checking account to pay off supposed debt. 

I have read to them every time the credit card Agreement and Disclosure I have which they acknowledge but nothing under section 11 ( default ) or section 12 ( closing or suspending account ) states they can transfer funds from my checking account. 

I spoke with a supervisor named XXXX today XX/XX/2023 within Navy Federal Credit Union from the credit card department and asked her how was the credit card funded. I asked if it was funded by the credit unions reserves or was it an extension of my credit as a consumer? She stated she doesn't know, then asked what do I mean... I asked again was my credit card was funded from the credit union reserves? She mentioned that she doesn't know. I asked her was there a finance charge I was paying on and how much did I pay? She stated she doesn't know. 

XXXX did tell me how to see how many payments I've made towards the credit card by looking at previous statements. She was still unable to tell me how the credit card was funded. I communicated with her how it was funded determines how I can lawfully pay off my debt. 

The finance charge does not include charges of a type payable in a comparable cash transaction under 15 USC 1605. So the payments that were made from cash were unlawful methods of payment they collected at Navy Federal Credit Union for the supposed debt. They also haven't validated how they funded my credit card.

I am a consumer under 15 USC 1602 ( i ) who did a consumer credit transaction 15 USC 1679 ( a ) ( 2 ) which created an open-end credit plan 15 USC 1602 ( j ) that didn't have an end term. My account was closed because of non-use but I couldn't use it since they claim I was over my limit. Navy Federal did not state clearly a lawful way to pay since cash can not be used to pay off a supposed debt from a finance charge.

After communicating with the several representatives of Navy Federal Union Credit they still haven't provided three things for my clarity. They have not clearly provided proof they can transfer funds from a checking account to pay any supposed debt. They have not clearly stated how credit cards are funded so the consumer can be aware of how to lawfully pay an obligation to the Credit Union if it comes from their reserves or an extension of credit from the consumers original credit card account. If it's an extension from the consumers credit card account, Navy Federal Credit Union can not close that open-end credit plan and it will be funded from the consumer original credit card account they extended credit form and reset debts every moth from that account. Finally they never stated when they will return all my total {$640.00} back into my checking and when I will get unlawful payments returned back also.

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