Consumer complaint received 2025-08-03 00:00:00
Product: Debt collection — Other debt
Issue: Took or threatened to take negative or legal action — Threatened or suggested your credit would be damaged
Company: PENTAGON FEDERAL CREDIT UNION
State: TX

Complaint narrative:
On XX/XX/XXXX, I obtained a {$25000.00} loan from PenFed, repayable over 60 months at an interest rate of 17.99 %. I made all required payments in full. However, after the loan was paid off, PenFed fraudulently added over {$10000.00} in unauthorized charges to the account. When I contacted PenFed for an explanation, they were unable to provide any justification for the charges and instead attempted to coerce me into signing a new contract to refinance the fraudulent amount.

When I refused, PenFed unlawfully extended the loan term to 69 months and intentionally reported false late payments to the credit reporting agencies. Additionally, I hold a credit card with PenFed, which I have never paid late. Despite this, PenFed began falsely reporting late payments on my credit card account in retaliation for my refusal to accept their fraudulent contract and as a means of pressuring me into compliance. 

Under 10 U.S.C. 987, the Military Lending Act ( MLA ), it is illegal for a lender to refinance or roll over a loan to a covered borrower. Specifically, the MLA prohibits creditors from extending credit in a manner that results in a rollover loan or a new loan to refinance an existing loan, unless the new loan is for a bona fide emergency purpose. The MLA also caps the Military Annual Percentage Rate ( MAPR ) at 36 %, which includes all interest, fees, and charges associated with the loan. PenFeds addition of over {$10000.00} in fraudulent charges to a loan that was already fully paid violates the MLAs 36 % MAPR cap. This breach legally voids the account and requires PenFed to provide restitution for all payments made, amounting to over {$40000.00}. Furthermore, PenFed is required to pay {$500.00} for each illegal transaction under the MLA.

In addition to the MLA, PenFed has violated several other federal laws and statutes, including the Servicemembers Civil Relief Act ( SCRA ) under 50 U.S.C. 3937, the Fair Credit Reporting Act ( FCRA ) under 15 U.S.C. 1681, the Truth in Lending Act ( TILA ) under 15 U.S.C. 1601, the Fair Debt Collection Practices Act ( FDCPA ) under 15 U.S.C. 1692, and 18 U.S.C. 1028 ( identity theft ). These violations are criminal under federal law and demonstrate a pattern of intentional misconduct. PenFeds actions also constitute fraud under 18 U.S.C. 1001, as they knowingly made false statements and engaged in deceptive practices to coerce me into signing a new contract. The intentional reporting of false late payments on my credit card account constitutes a violation of the Fair Credit Reporting Act ( FCRA ) under 15 U.S.C. 1681, which prohibits the furnishing of inaccurate information to credit reporting agencies.

Furthermore, PenFed has violated the Equal Credit Opportunity Act ( ECOA ) under 15 U.S.C. 1691, which prohibits creditors from discriminating against any applicant with respect to any aspect of a credit transaction. PenFeds actions also violate the Consumer Financial Protection Act ( CFPA ) under 12 U.S.C. 5536, which prohibits unfair, deceptive, or abusive acts or practices ( UDAAP ) in connection with any transaction with a consumer for a consumer financial product or service. The intentional misrepresentation of the loan terms and the coercive tactics used by PenFed to pressure me into signing a new contract constitute violations of the CFPA.

PenFeds actions also violate the Racketeer Influenced and Corrupt Organizations Act ( RICO ) under 18 U.S.C. 1962, as their fraudulent and coercive practices constitute a pattern of racketeering activity. The intentional reporting of false late payments and the coercive attempts to refinance the loan demonstrate a pattern of criminal activity that falls under the scope of XXXX 

I filed a complaint under CFPB # XXXX. PenFed responded by not addressing the complaint, just to have the CFPB complaint closed. Therefore, I filed a complaint under XXXX # XXXX. The XXXX forwarded the complaint back to the CFPB under CFPB # XXXX. Again, PenFed thwarted the complaint just to have the complaint closed. Along with this complaint, I have filed an FTC ID Theft Affidavit and credit reporting agency disputes. I will use these pleadings in Federal Court as evidence of PenFeds intent on the allegations. It is well-settled by the Supreme Court that there is no statute of limitations on fraud in the United States . 

Additionally, I exited XXXX XXXX in XXXX and reentered in XXXX, making me eligible for the protections under the Servicemembers Civil Relief Act ( SCRA ). Despite my eligibility, PenFed has refused to comply with the SCRA requirements, further demonstrating their intentional misconduct and violations of federal law.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation