Consumer complaint received 2019-02-25
Company: UNITED SERVICES AUTOMOBILE ASSOCIATION
State: OH
Product: Vehicle loan or lease
Sub-product: Loan
Issue: Getting a loan or lease
Sub-issue: Confusing or misleading advertising or marketing

Complaint:
On XX/XX/2019, I started an application for an auto loan from USAA Federal Savings Bank through the USAA XXXX app, for the purchase of a new XXXX automobile. On the USAA website ( https : //www.usaa.com/inet/wc/bank-loan-auto-main? wa_ref=pub_global_products_bank_auto ) USAA advertises a discounted interest rate for using the USAA Car Buying Service and/or for enrolling in automatic payments. USAA offers a .5 % discount on interest rates for using the USAA Car Buying Service to locate/purchase a vehicle through a participating dealership and a .25 % discount on interest rates for signing up for automatic payments. Both discounts can be applied on the same auto loan reducing the approved interest rate a total of .75 % ( .5 % + .25 % = .75 % ). After beginning the auto loan application, USAA, on XX/XX/2019, uploaded two documents to my USAA account for my review. The first document was titled USAA Federal Savings Bank Your Credit Report and the Price You Pay for Credit Risk-Based Pricing Notice and the second document was letter with an attached Insurance Disclosure Form. Neither document discussed interest rates. 

On XX/XX/2019, I went to the Car Dealership USAA identified to complete the purchase of the vehicle. While at the dealership I completed the auto loan application ( still using the USAA XXXX app ) using an e-signature. After signing the application, on XX/XX/2019, USAA uploaded a Consumer Loans Closing Document, which  contained a Note, Disclosure, and Security Agreement within it. The Note, Disclosure, and Security Agreement displayed the Annual Percentage Rate ( APR ) I was approved for, which was 4.1462 % ; however, nowhere in the 7-page document does it state that APR included either the .5 % or the .25 % discounts. In fact there was no mention of any interest rate discounts at all. I believed USAA would apply these discounts after the paperwork was completed at the dealership, which would enable USAA to confirm I purchased the vehicle from a dealership associated with the USAA Car Buying Service. Accordingly, I then had the loan documents emailed to the dealership to complete the transaction. 

On XX/XX/2019, USAA uploaded an Addendum to Note, Disclosure and Security Agreement. This addendum disclosed the principal amount of the loan and an interest rate of 3.64 % ( APR 3.6457 % ). This rate reflected the .5 % discount for using the USAA Car Buying Service ( 4.14 - .5 = 3.64 ) ; however, it did not seem to include the .25 % discount for enrolling in automatic payments. 

On XX/XX/2019, I contacted USAA to enroll in automatic payments and get request the additional .25 % discount to the interest rate of my auto loan. The USAA representative I spoke to ( XXXX ) stated that I was already enrolled in automatic payments and the original interest rate I was given ( 4.14 % ) included the .25 % discount for enrolling in automatic payments. I stated, this was inaccurate because I had not yet enrolled in automatic payments. XXXX then referred to a Loan Approval Letter which she stated was in the My Documents section of my account. I checked My Documents but the approval letter was not there. XXXX then upload the letter, which I reviewed. The approval letter stated I was approved for a loan for the purchase of a car and gave several possible repayment terms and the applicable APR. The letter stated for a loan term of 60 months, my APR would be 4.14 % and referenced a note. The note, on page 2, stated, Rate reflects a 0.25 % Annual Percentage Rate discount for automatic payments from a checking or savings account. Your loan terms may vary based upon the exact term, collateral age, collateral type and loan amount. 

I told XXXX, I had not received this letter previously, which is reflected in its lack of being uploaded to my account until XX/XX/2019, as seen in the attachment. Moreover, I asked why the original XX/XX/2019 Note, Disclosure, and Security Agreement did not disclose the discounts and she stated it did. I informed her it did not and she placed me on a 10 to 15-minute hold while she reviewed the document. XXXX then came back and stated, she understood my concern ; however, the discount was disclosed in the application on the app and I agreed to it. I asked her to show my any document which I signed/agreed to this and XXXX stated she could not provide it because it was in a part of the loan application the app. Accordingly, there is no document that states I enrolled in automatic payments or received the .25 % discount for doing so. Furthermore, the initial XX/XX/2019 agreement indicates my rate of 4.14 % and makes no mention of any discounts ; and the modified agreement ( the addendum ) only indicates.5 % discount being applied. XXXX stated nothing else would be done and she could not help me. Accordingly I requested XXXX transfer me to someone who would be able to assist and she transferred me to the Executive Customer Resolution team, where I spoke to XXXX. 

XXXX essentially stated the same information as XXXX ; however, XXXX stated several times that the XX/XX/2019 agreement reflected the final APR, which included all discounts that were to be applied. However, this did not explain how the agreement was modified via the addendum on XX/XX/2019 to reflect the .5 % discount for using the USAA Car Buying Service. I asked XXXX why the original agreement did not state the discount was included and he referred me to the aforementioned USAA website which advertised the discounts. XXXX then referenced note 2 at the bottom of the webpage, which stated : Displayed rates are our lowest Annual Percentage Rates ( APR ), available on terms up to 60 months, apply to dealer purchases and vehicle refinancing, and include a discount for automatic payments ( 0.25 % ) and for purchasing through the USAA Car Buying Service ( 0.50 % ). Rates subject to change without notice and vary based on approved credit and other factors, such as term, model year and loan amount. Monthly payments vary based on APR for which borrower is approved, term for which vehicle is financed, and amount borrowed. Financing for 72-month terms requires financed amount of {$15000.00} or greater and approved credit. Financing for 84-month terms requires financed amount of {$25000.00} or greater and approved credit. 

XXXX reference to note in an USAA advertisement is ludicrous given the fact that, by its very nature, its intended to attract potential customers to USAA. The note website itself indicated that it was for a displayed rate of 3.09 % APR. Furthermore, an advertisement in and of itself is not a legally binding clause on an auto loan contract. Its marketing. I asked XXXX to provide me with a single document that I signed which indicated the interest rate identified on the XX/XX/2019 agreement included the .25 % discount. XXXX first referenced the agreement itself, which he later admitted did not clearly state the discount was included. XXXX referenced the loan approval letter, which reflected an interest rate of 4.14 % and in the notes has a disclaimer which states the rate reflects a 0.25 % Annual Percentage Rate discount for automatic payments from a checking or savings account. I told XXXX I did not receive the approval letter until XX/XX/2019, but even then, the letter which XXXX states was delivered on XX/XX/2019, states, Your loan terms may vary based upon the exact term, collateral age, collateral type and loan amount in the same note which states the .25 % discount was applied. 

The auto loan I received does not accurately reflect the information advertised on USAAs own website. Accordingly, USAAs loan tactics and marketing are confusing, misleading, and unfair resulting in their ability to change the terms of the loan after closing.

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