Consumer complaint received 2024-08-16 00:00:00
Product: Checking or savings account — Checking account
Issue: Closing an account — Funds not received from closed account
Company: NAVY FEDERAL CREDIT UNION
State: LA

Complaint narrative:
I am writing to formally lodge a complaint against Navy Federal Credit Union ( NFCU ) for what I believe to be unlawful and unfair practices related to the handling of my account, which has caused significant financial distress and has placed me at risk of eviction. 

On XX/XX/24 I spoke with a representative from Navy Federal who informed me that they were closing my account. During this conversation, I specifically informed the representative that my payroll check was scheduled to be deposited into this account and that the funds were crucial for paying my rent. The representative assured me that once the check was received, it would be reversed because the account would not accept any funds due to the closure.

However, when my payroll check for {$1100.00} was deposited, Navy Federal did not reverse or reject the deposit as they had stated. Instead, they kept the funds and applied the entire amount towards a charged-off account that I previously had with Navy Federal . This action left my account with a XXXX balance, in direct violation of Louisiana Revised Statutes XXXX, which requires that at least {$1000.00} be left in an account after any setoff. These funds were designated for my rent, and this action has placed me in a dire financial situation, leading to the imminent risk of eviction.

Upon contacting Navy Federal to rectify the situation, I was misled by being told that I would need to speak to another department to discuss the possibility of retrieving my funds, despite having been assured previously that my paycheck would be returned to me. Additionally, Navy Federal holds funds in my savings account, and I was advised that if I made a payment arrangement, I would be allowed to withdraw the remaining balance. I complied by paying off my credit card account and setting up a payment arrangement, yet Navy Federal still refused to allow me access to my savings, contrary to the agreement and without providing any legal notification of an offset.

Furthermore, Navy Federal applied funds from my savings account to pay off credit card balances without my authorization and without providing notice of their intention to do so. This is particularly egregious as my credit card account was current at the time, and such actions, in my understanding, are not compliant with federal or state regulations.

During a subsequent conversation with another NFCU agent, I inquired about the specific laws regarding setoffs and collections. The agent repeatedly refused to answer my questions about these laws and, despite my persistence, stated that she would end the call rather than provide the requested information. I informed her that I was recording the conversation, during which she continued to refuse to address my questions regarding the legality of the actions taken against my account. This refusal to provide transparency and clarity further demonstrates NFCUs disregard for consumer rights.

I am requesting that the Consumer Financial Protection Bureau intervene in this matter. Specifically, I am asking for : 1. The immediate return of my {$1100.00} paycheck, which was unlawfully seized.

2. Compensation for the financial distress and damages I have incurred, including but not limited to late fees, legal fees, and any other costs associated with the potential eviction.

3. A formal investigation into Navy Federals practices related to the mismanagement of my account, the unauthorized use of setoff, and the lack of proper communication regarding these actions.

4. An examination of the training and practices of NFCU representatives, particularly regarding their understanding and communication of consumer rights and relevant laws. 

I appreciate your attention to this serious matter and look forward to your prompt response and action.

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