Consumer complaint received 2025-01-14 00:00:00
Product: Vehicle loan or lease — Loan
Issue: Managing the loan or lease — Problem with the interest rate
Company: NAVY FEDERAL CREDIT UNION
State: CO

Complaint narrative:
On or about XX/XX/XXXX I contacted Navy Federal Credit Union ( NFCU ) regarding a used car loan. 

I knew the exact vehicle I was going to purchase from XXXX XXXX XXXX XXXX XXXX XXXX XXXX with app. XXXX miles and communicated the same to NFCU on XX/XX/XXXX. 

I was informed both verbally and later mailed loan agreement paperwork that the loan for such vehicle would be offered at 4.49 %. 

NFCU did play a pre-recording that the interest rate may change if the vehicle purchase changed, but did not verbally inform of the XXXX mileage requirement. 
The paperwork also clearly advertises the offered interest rate of 4.49 %, but only has boiler plate legalese language in much smaller font regarding any caveat, including the mileage requirement. 

I continued by purchasing the same vehicle that I had informed NFCU would be purchased and did not attempt to consider or compare other potential banks or lenders because of the advertised offer made by NFCU. 

I was not made aware either verbally or in writing that the interest rate changed to 5.49 % because the vehicle had XXXX miles and NFCU would consider any vehicle with XXXX XXXX as a " used vehicle '' with a higher interest rate. 

I have two jobs in the U.S. government and XXXX XXXX XXXX XXXX with a higher level of income and high credit score that would have supported a lower interest rate with better terms at a different bank or lender. I would have shopped for a different bank or lender had the different and higher interest rate of 5.49 % been more clearly communicated to me. However, because NFCU clearly advertised a 4.49 % interest rate and did not clearly inform of the legal caveats or provisos regarding mileage, I was not able to consider other banks or lenders. Had NFCU more clearly communicated the different/higher interest rate, I would have shopped for options and made a different choice in either ( 1 ) the vehicle purchased or ( 2 ) the vehicle loan.

Any reasonable consumer would have relied on the clearly advertised 4.49 % interest rate and could not easily discern the legalese that allowed NFCU to single handedly raise the interest rate. The real terms of the loan, even important details such as the interest rate, were hidden and not well communicated. The verbal disclosures and paperwork were wholly one-sided and permitted NFCU to take action without adequately informing the consumer. Had the important details been more clearly communicated, a reasonable consumer may make a different choice. If this happened to me, it could also happen to other lower income or less qualified buyers who count on NFCU to be forthright and transparent, but fall into the trap of changed terms, including interest rates, that are not clearly communicated to the consumer. 

I was not made aware of the higher interest rate until NFCU called me on XX/XX/XXXX regarding signing the Promissory Note. NFCU never contacted me to discuss any change in interest rate, but did call to " walk me through '' signing the note. It was only then, prior to signing, that i saw the changed interest rate and finances charges. The customer service representative who had called me transferred me to a different department to discuss the changed terms. This was nearly three weeks after I purchased the vehicle with the understanding that the interest rate was 4.49 %. It is now too late to consider other vehicles or lending options. NFCU only provided communication or made proactive contact with me when it benefited them. 

I attempted to resolve the issue with the Navy Federal Credit Union ( NFCU ) Lending Department on XX/XX/XXXX. I first spoke with a representative for app. XXXX, who only reiterated that NFCU was permitted to change the interest rate to a higher rate because of the app. XXXX mileage. I asked to speak with a supervisor and was transferred to XXXX. I had a lengthier 10min discussion with XXXX and explained my position as outlined above. However, XXXX continued to rely on the legalese disclosures and blamed me as the consumer for not reading or understanding the paper work. He did admit that none of the pre-recorded verbal disclosures specifically addressed the fact that XXXX vice XXXX mileage permitted NFCU to change the interest rate. I explained that, as a normally well-versed consumer and customer, i expected better communication and service from NFCU. However, XXXX continued to blame me as the customer and rely on the boiler plate paperwork that permitted NFCU to take such one-sided action. He relayed that nothing could now be done to change the interest rate to the originally communicated 4.49 %. 

As a consumer, i do feel that the original interest of 4.49 % was well communicated and even highlighted by NFCU, including verbally stating 4.49 % based on a description of the purchased vehicle and highlighting the 4.49 % interest rate on the first page of the paperwork. Other more nuanced, but critical, information was not communicated in a way that a reasonable person might understand. This allowed NFCU to take one-sided action that benefitted NFCU, but did not allow the consumer to understand the full cost of credit or shop for better rates or lending terms. As a consumer who has lending options, I would have most certainly made a different decision had the critical lending terms and interest rate been more clearly communicated to me and if NFCU had contacted me to discuss the change in interest rate rather than only contacting me when it benefited them.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with non-monetary relief