Consumer complaint received 2018-12-01
Product: Payday loan, title loan, or personal loan — Installment loan
Issue: Problem with the payoff process at the end of the loan — 
Company: TD BANK US HOLDING COMPANY (FL)

Roughly XXXX or XXXX years ago, I purchased a furniture set through a company that I financed. During the life of that loan, it was sold to another organization, XXXX XXXX XXXX XXXX. Automatic payments were set up for the loan, with the understanding that the final payment would be in XX/XX/2018.

In XX/XX/XXXX, my remaining balance was {$37.00}. The monthly payments up until that point were {$32.00}. It was communicated beforehand that the final payment would be slightly more. However, the company 's payment system, through which my bank account was automatically debited each month did not process the last payment because the scheduled withdrawal amount of {$32.00} was not sufficient to cover the remaining balance of {$37.00} ; or at least that is the understanding I gained from my conversation with the company.

At no point in our communications was this functionality limitation of their system communicated to me. In my initial agreement with the organization, and I assume ownership of that agreement was transferred but still binding, I agreed to pay the final amount of {$37.00}. Because I had a remaining balance, I began accruing a {$1.00} finance charge each month. Afterwards, the minimum payment due was set to {$2.00} and the system began debiting my account again. This meant that each month, I would pay the company a {$1.00} fee and only {$1.00} would go to my principal balance, potentially extending the loan an additional XXXX months. Since I run on a budget and {$2.00} is immaterial, I did not notice until XXXX months later. Yes, the total impact is not significant. This cost me {$6.00}, and if it went unnoticed, would have cost me {$37.00}, barring any other fees ( which are probable ) that I am unaware of. However, their customer base for this function of their enterprise is comprised of mostly low income people, i imagine. Those typically have to finance purchases of this nature due to their inability to expend amounts of a few thousand in a single instance. If this practice is done to all customers, the company is reaping a massive profit in what I feel is a very unethical, and predatory manner. These are the items that give me the impression that this practice is intentional and hopefully in violation of some form of regulation or ethical standard : 1. ) The payment schedule was agreed to in the initial contract. The final balance was communicated to me within that schedule. When the automatic payments were agreed to, it was not communicated to me nor was there any indication that the final payment would not also be automatically withdrawn. In fact, though I have not yet located the initial paperwork, I am certain that the language used to describe the service stated that the minimum payment due would be withdrawn, and am willing to research further if this complaint requires additional information. Continuing, if the minimum payment due was {$37.00} on the payment schedule, why was it not also {$37.00} in the system?

2. ) The structure of the payment system indicates that this process is intentional. As discussed, the system refused to process the final payment altogether because it was not sufficient to cover the remaining balance. External to the fact that it was implied the automatic withdrawal would adjust in the final month, the system did not apply the {$32.00} amount to the balance, either. By not applying the {$32.00} and instead refusing to process any contribution to the account in this instance or set of circumstances indicates, to me at least, that this is not a functionality limitation of their software, but rather an intentional design choice. An intentional design choice that increases the life of a loan by potentially a significant amount of time, should it go unnoticed by the consumer.

3. ) In further support of the intentional nature and possible predatory practice of the system, consider the ensuing payments after XX/XX/XXXX - in XX/XX/XXXX, the system was programmed not to pay the {$37.00} remaining balance ( that was scheduled in the agreement ) due to the automatic withdrawal amount being set to only {$32.00}. However, once the balance was unpaid, and finance charges began accruing, the automatic withdrawal amount was adjusted to {$2.00}, without my consultation or authorization. The system then began applying a {$1.00} finance charge each month and only contributing {$1.00} to my balance. At this point, though the automatic payment amount was less than the remaining balance as was the case in XX/XX/XXXX when the system rejected the automatic payment, the automatic payments were able to be processed again.Due to the discrepancy in withdrawal practices, significant reduction in automatic withdrawal amount which would conveniently extend the length of the loan and allow them to accrue additional finance charges, the small amount of the new automatic withdrawal after the " delinquency '' has occurred ( which seems designed to slip through consumers ' notice due to the immateriality of the amount, as happened to me ), I feel this is a predatory practice.