Consumer complaint received 2018-08-13
Product: Checking or savings account — Checking account
Issue: Managing an account — Deposits and withdrawals
Company: NAVY FEDERAL CREDIT UNION (MA)

On XX/XX/2018, Navy Federal Credit Union froze the balance of my checking account, which contains approximately {$20000.00}. They allowed funds to be deposited, but they are not allowing me to withdraw any of my funds. I contacted Navy Federal to inquire about the reason for the freeze. They put me through to their fraud department, which explained to me that multiple nonmembers who had made counter deposits to my account reported that their payments were a part of some scam. 

I buy and sell bitcoins ( and fractions of bitcoins ), and have done so through that checking account for approximately three years. I have never had a problem with Navy Federal up until now. In an ordinary transaction, a person messages me saying they would like to buy X amount of bitcoin. I tell them how much money to deposit into my account. The person goes into the bank and deposits that much cash into my checking account. I then send that person the bitcoin. 

Sometimes scammers target people like me in the following way. The scammer will message me and ask to buy, say, {$5000.00} worth of bitcoin. I will provide the person ( not knowing they are engaging in fraud ) with my account information. Instead of depositing the cash themselves, they direct the victim of some scam to deposit the cash into my bank account. After the victim deposits the money into my account, the scammer messages me and indicates that he has made the deposit. I then send the bitcoin to the scammer, reasonably believing him to be the person who made the deposit and having no reason to doubt that the transaction is legitimate. I take reasonable steps to try to prevent this from happening by requiring the customer send me a picture of the deposit receipt with the message " for the purchase of bitcoin '' written across it, but the scammer apparently found some way to trick the person into writing that on the receipt or by uploading a XXXX receipt. 

The person I spoke to in the fraud department seemed to think that I was some sort of scammer. He indicated to me that if Navy Federal felt like it, they could freeze my account forever and that there would be nothing I could do about it. They said that my account would remain frozen pending the outcome of their investigation. Navy Federal has not contacted me and asked me for any information about those transactions, so they do not seem to be conducting much of an investigation at all. One of my attorneys sent them a demand letter, and they have not replied. 

The Expedited Funds Availability Act ( " EFAA '' ) requires that a bank make all cash deposits available for withdrawal to the customer by the end of the following business day. The entire balance of my checking account consists of currency deposits made by various customers to my checking account at Navy Federal branches. Several weeks have gone by, and those funds are still not available to me. Therefore, Navy Federal Credit Union is in violation of the EFAA once again. The EFAA lays out the conditions under which a bank may withhold funds from a customer when fraud is suspected, and makes clear that these conditions do not apply to cash deposits. 

Interestingly enough, Navy Federal has already been fined by the CFPB for illegally freezing consumer checking accounts. They are at it again.