Consumer complaint received 2024-08-19 00:00:00
Product: Credit card — General-purpose credit card or charge card
Issue: Closing your account — Company closed your account
Company: NAVY FEDERAL CREDIT UNION
State: NJ

Complaint narrative:
Dear CFPB, I am writing to file a formal complaint against Navy Federal Credit Union for the unlawful closure of my credit card account, which took place on XX/XX/year>. The circumstances surrounding the closure of this account raise serious concerns regarding potential violations of several federal consumer protection laws, and I am seeking the CFPB 's immediate intervention in this matter. 

Background of the Situation : On XX/XX/year>, I was contacted by a representative from Navy Federal 's in-house collections team regarding my credit card account, which was two months past due. During this conversation, I was informed of financial hardship options designed to keep my account active. The representative assured me that my interest rate would be reduced to 3 % for a period of 12 months and that Navy Federal would be evaluating my eligibility for an additional financial program. At no point was I informed that my account was under consideration for closure. 

However, on XX/XX/year>, just three days later and prior to receiving any further communication about my eligibility for the financial program, Navy Federal closed my account without notice. This abrupt action was unexpected and contrary to the information provided during the XX/XX/XXXX call, during which I was led to believe that my account was still active and being reviewed for assistance. 

Violations of Consumer Protection Laws : Fair Credit Reporting Act ( FCRA ) Violation : Navy Federals failure to provide complete and accurate information about the status of my account during our XX/XX/XXXX conversation violates the FCRA. The closure of the account without proper notification has likely caused adverse effects on my credit report, and I was not given an opportunity to address or prevent this negative outcome. 
Fair Debt Collection Practices Act ( FDCPA ) Violation : The communication from Navy Federal was misleading, as I was led to believe that my account was being offered hardship options and would remain active. The sudden closure of the account, without disclosing that it was being targeted for shutdown, constitutes deceptive and unfair collection practices, in violation of the FDCPA. 

Breach of Good Faith and Fair Dealing : By failing to inform me of the true status of my account and then closing it without warning, Navy Federal breached the implied covenant of good faith and fair dealing. I was denied the opportunity to make informed decisions regarding my account and was misled into believing that it was being maintained in good standing. 

Truth in Lending Act ( TILA ) Violation : Navy Federals actions may also constitute a violation of TILA, which requires creditors to provide clear and accurate disclosures about the terms and conditions of credit. The failure to inform me of the impending closure of my account while discussing potential hardship programs falls short of these requirements.

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