Consumer complaint received 2025-11-19 00:00:00
Product: Checking or savings account — Checking account
Issue: Managing an account — Deposits and withdrawals
Company: NAVY FEDERAL CREDIT UNION
State: TX

Complaint narrative:
I am filing a complaint against Navy Federal Credit Union for : ( 1 ) failure to provide the required verbal disclosures during a dispute call, ( 2 ) improper reversal of a provisional credit without effective advance notice, and ( 3 ) unauthorized right-of-offset withdrawals that caused financial harm. 

I contacted Navy Federal by phone regarding a XXXX dispute. The representative handled the entire dispute process and submitted the claim for me over the phone, which meant I did not have the opportunity to view or acknowledge the disclosures I normally would have seen if I had filed online. This includes the required warning that the credit issued is temporary, may be reversed, and could impact my account. Because the dispute was filed by phone, verbal disclosure was required, but none was provided. 

The provisional credit amount was approximately {$400.00}, and Navy Federal later swept {$0.00} from my savings account using right-of-offset after the reversal pushed my account negative.

A Navy Federal supervisor later reviewed the call recording and confirmed to me directly that the representative never verbally disclosed that the credit was temporary, never explained that it could be reversed, and never warned me that my account balance could be affected. The supervisor acknowledged that I was not verbally informed of any of these required details. 

After the call, I relied on the representatives explanation and acted in good faith. When I checked my app ( as instructed by the representative ) and saw the funds in my account, I reasonably believed the dispute was resolved and sent the money to the correct XXXX recipient based on the verbal communication and the updated balance shown in my app. At this point, I still had not seen any email notices. 

I later received a push notification from the Navy Federal mobile app informing me that my account was overdrawn. This was the first time I became aware that the provisional credit had been reversed. Navy Federal keeps insisting that they emailed me notice, but the harm occurred before any email could have prevented anything. Written notice does not satisfy the requirement for effective notice when the consumer relied on verbal communication and the representative failed to disclose essential information during the call. 

Furthermore, Regulation E ( 1005.11 ( d ) ( 2 ) ) requires that if an institution does not give proper advance notice of a provisional credit reversal, it must protect the consumer from overdraft harm for five business days. Navy Federal did neither. Instead, after my balance went negative from the reversal, Navy Federal also used right-of-offset to withdraw funds from my savings account without any verbal warning or effective notice, which increased the harm.

I respectfully request that CFPB require Navy Federal to : 1. Reverse the overdraft caused by the improper reversal of the provisional credit. 
2. Reverse and return the right-of-offset sweep taken from my savings account.

3. Restore my checking and savings accounts to their proper balances.

4. Correct their dispute-handling procedures so that consumers receive proper verbal disclosure when disputes are filed by phone.

5. Ensure Navy Federal complies with Regulation E and CFPBs effective-notice standards.

I acted responsibly and in good faith based on the information I was given. This harm was caused solely by Navy Federals failure to provide the required verbal disclosures and failure to give effective notice before debiting the provisional credit.

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