Consumer complaint received 2024-08-01
Product: Vehicle loan or lease — Loan
Issue: Getting a loan or lease — Confusing or misleading advertising or marketing
Company: PENTAGON FEDERAL CREDIT UNION (CA)

Subject : PENFED APPROVES LOAN FOR XXXX XXXX - CHANGES RATE TO XXXX XXXX ON LOAN AGREEMENT BACKGOUND : On XX/XX/year>, I applied for a new car loan through PenFed Car Buying Service for a term of XXXX  months at an XXXX of XXXX % ( for using the buying service ). However, the interest rate on the application would only show XXXX  %. When I inquired about the change, I was informed that once I provided the XXXX and PenFed confirms the purchase is through XXXX of the qualified dealerships the XXXX would be changed to 4.99 %. 
I purchased a XXXX XXXXXXXX XXXX XXXX through a qualified dealership that evening and provided the VIN to PenFed on XX/XX/year>. I received an email on XX/XX/year>, at XXXX XXXX  ; We are reaching out to inform you that we have successfully verified the Lead you submitted with the PenFed XXXX XXXX XXXX through XXXX. This has given you a discount on your approved interest rate, leaving your new XXXX at, XXXX XXXX for XXXX. You should be receiving email confirmation shortly providing you with directions regarding the next steps in finalizing your loan. At the same time, I received an email Congratulating me on my auto loan approval : {$21000.00} at XXXX XXXX for XXXX XXXX, I also checked online and saw the exact same information. I was elated with PenFeds quick and efficient loan process ; until I got to the doc signing. 
I went online to sign the documents ; however, when I got to the Choose How To Receive Your Funds page I was only presented with XXXX options : XXXX. USPS Ground ( 7-10 Business Days ) XXXX XXXX. XXXX ( XXXX Business Days ) {$20.00} XXXX. Branch Pickup ( Same Business Day ) Free I live in XXXX XXXX  so the closest branch is a XXXX XXXX XXXX ( during non-rush hour ) to XXXX XXXX. Option XXXX is a horrible option and not a realistic choice. Option XXXX doesnt work either since the dealership requires that I secure financing and get them a check within 5 days, or I will default to their financing. Option XXXX is the only viable option and allows me time to deliver the check to the dealership. I chose XXXX and, on the next page Review, and Next Steps I confirm the check amount {$21000.00} and the {$20.00} check delivery fee ( I was hoping to pay the delivery fee with a credit card ). 

COMPLAINT : However, when I continue it takes me directly to sign the Promissory Note docs. That is when I saw that the XXXX was changed from XXXX XXXX XXXX XXXX  %- with no explanation. I do not even know if this is legal or not but without any opportunity to pay the delivery fee separately, PenFeds policy is to automatically increase the loan amount and for some unexplainable reason to increase the APR by .03 %- without notice of explanation to the borrower. I have called PenFed twice to get this corrected and I was told by Amen that it was PenFeds policy to add the delivery fee which caused the APR increase. I told him that I will pay the delivery fee separately to avoid the APR increase but per policy there was nothing he could do. I asked to talk to a supervisor or XXXX, but no one was available, but I was told XXXX ( supervisor/manager ) would call me right back no one has called me back. 
I have less of an issue with the {$20.00} being added to the loan amount ; however, taking advantage of borrowers to increase the interest rate is unconscionable. I asked if I could cancel this loan and resubmit the loan to include the {$20.00} but then I would still have to select the delivery fee which would be added to the loan amount again and still increase the XXXX. In my opinion, this is either bait and switch or a very deceptive lending tactic to entrap borrowers who, like me, are forced to use XXXX 
Since no one at PenFed is responding to my request to speak to a supervisor or XXXX and XXXX running out of time to resolve this issue before the dealership defaults to their lender of choice. I signed the loan agreement under duress and was forced to seek resolution through outside organizations. I have also filed a complaint with PenFed, but I doubt I will hear a response before they receive an inquiry from CFPB. 

REMEDY : XXXX. I would like the XXXX of Directors at PenFed to investigate this policy, determine if their policy is transparent and in the best interest of their customers. I have never seen this practice with any other lender. I would like to know if the board believes that CFPB and XXXX would endorse or support what I consider a predatory practice of increasing the XXXX on borrowers for a {$20.00} delivery fee automatically added to the loan amount for borrowers who choose to have funds delivered by XXXX. 
XXXX. I feel a just remedy would be for PenFed to correct the XXXX on my loan agreement ( ending in XXXX ) to reflect the approved 4.99 % interest rate. If they wish I will happily cover the {$20.00} delivery fee with my credit card, so the loan amount does not change ( I was told the {$20.00} loan increase was what caused the XXXX increase makes no sense to me ). 
XXXX. I request an email or letter from PenFed XXXX XXXX XXXX to fully explain their intent, purpose, and reasoning of their policy to increase borrowers XXXX just because they chose to have the funds delivered by XXXX with a {$20.00} delivery fee.