Consumer complaint received 2025-03-10 00:00:00
Product: Checking or savings account — Savings account
Issue: Managing an account — Deposits and withdrawals
Company: NAVY FEDERAL CREDIT UNION
State: TX

Complaint narrative:
In XX/XX/XXXX, I owed a balance to Navy Federal Credit Union ( NFCU ) related to their overdraft protection ( OOPS protection ). I proactively reached out to NFCU multiple times to set up a bi-weekly payment arrangement to repay the debt. However, I was told that NFCU could not accept payments because the account had been sent to collections. Based on this information, I was led to believe that NFCU no longer had the ability to withdraw funds directly from my account. 

Now, on XX/XX/XXXX, NFCU unexpectedly withdrew {$770.00} from my account without my authorization or any prior notice. This action caused me extreme financial hardship, as these funds were set aside for a down payment on a home for me and my children. Due to this withdrawal, I am now unable to secure housing and may be facing homelessness. 

This is problematic for several reasons : XXXX. Inconsistent and Misleading Information NFCU initially refused to accept my payments, stating the debt was sent to collections, only to later withdraw funds from my account after months of no contact. 
XXXX. Failure to Provide Notice I was not given any warning that NFCU planned to take this money. 
XXXX. Potential Unfair Collection Practices If NFCU had fully transferred this debt to a third-party collection agency, they should not have retained the right to deduct funds from my account without my consent. 

NFCUs actions raise serious legal concerns regarding their collection practices. Based on the following consumer protection laws, I believe NFCU has acted unfairly and possibly illegally : XXXX. Violation of the Fair Debt Collection Practices Act ( FDCPA ) ( 15 U.S.C. 1692c ) If NFCU sold the debt to a third-party collection agency, they no longer had the legal right to collect it themselves. 
The FDCPA restricts original creditors from engaging in deceptive or unfair collection practices, including misleading a consumer about the status of their debt. 
By telling me the debt was sent to collections, refusing payment, and then taking money from my account later, NFCU may have misled me about their right to collect. 

XXXX. Violation of the Fair Credit Reporting Act ( FCRA ) ( 15 U.S.C. 1681s-2 ( a ) ) If NFCU charged off the debt and reported it as a loss to credit bureaus, their later attempt to withdraw funds could constitute double collection, which is a violation of consumer consumer protection laws. 
If my debt was marked as charged off but NFCU still withdrew money from my account, they may have provided inaccurate or misleading credit reporting, violating FCRA regulations. 

XXXX. Unfair and Deceptive Practices ( UDAP ) Federal Trade Commission Act ( Section 5 ) Under Section 5 of the FTC Act, it is illegal for financial institutions to engage in unfair or deceptive acts or practices ( UDAP ) in consumer transactions.

By initially refusing my payment arrangement, telling me the debt was sent to collections, and then unexpectedly taking money months later, NFCU may have engaged in deceptive collection practices that violate federal consumer protection laws.

I am requesting that the CFPB investigate this matter and hold NFCU accountable for their misleading and unfair debt collection practices. I am also seeking a refund of the {$770.00} as this withdrawal was made without notice and has resulted in severe financial hardship for my family.

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