Consumer complaint received 2025-10-09 00:00:00
Product: Checking or savings account — Checking account
Issue: Managing an account — Problem using a debit or ATM card
Company: NAVY FEDERAL CREDIT UNION
State: VA

Complaint narrative:
Formal Complaint Misclassification of Regulation E Dispute by Navy Federal Credit Union I am submitting this complaint regarding Navy Federal Credit Unions mishandling and misclassification of my Regulation E dispute for a debit card transaction in the amount of {$580.00}. 

On XX/XX/XXXX, I paid through XXXX for a two-business-day shipping service fulfilled by XXXX ( XXXX XXXX ). The shipment was scheduled for pickup on Tuesday, XX/XX/XXXX, with delivery scheduled for Thursday, XX/XX/XXXX, Then Friday, XXXX XXXX shown on the attached booking confirmation and tracking screenshots. 

However, XXXX failed to complete the scheduled pickup on Tuesday despite the pickup location being responsive all day. Pickup did not occur until Wednesday, XX/XX/XXXX and the shipment was not delivered until Wednesday, XXXX XXXX business days after pickup and triple the transit time. 

During transit, tracking continued to display XXXX for Friday XX/XX/XXXX XXXX, clearly representing a specific delivery commitment consistent with the two-day service I paid for. At no point was I informed of capacity delays or that the timeline was only an estimate. Other carriers on the same platform routinely meet their estimated timelines. 

Because the carriers failure to pick up and deliver within the agreed timeline resulted in my customer demanding a refund, this delay directly harmed my business. The payment I authorized was for an expedited two-day service ; the service actually rendered was materially different. 

Despite clear evidence and my repeated written explanations ( sent XX/XX/XXXX and XX/XX/XXXX ), Navy Federal re-debited my account and closed the case, classifying it under Section 17 Other Reasons for Dispute of their Debit Card Disclosure instead of Section 16 Billing Error Resolution. They claim this issue is outside Regulation E.

This classification is incorrect and non-compliant with 12 C.F.R. 1005.11 ( a ) ( 1 ) ( ii ), which defines an error as : An incorrect electronic fund transfer to or from the consumers account.

I authorized a transfer for a two-day expedited delivery. The transfer that actually occurred was for a six-day standard delivery following a missed pickup and broken delivery commitment. That is an incorrect electronic fund transfer, not a mere merchant dissatisfaction issue. 

Under the CFPBs Official Staff Commentary to 1005.11, an error exists when the transaction was not authorized as executed. The transaction executed here was not the one I authorized.

Navy Federals refusal to treat this under Regulation E deprives me of my federally protected error-resolution rights, including provisional credit and a good-faith investigation. 

When I attempted to call on XX/XX/XXXX to escalate the matter to a supervisor, I was instead redirected to a survey line, preventing me from providing my statement on the recorded line. This further demonstrates a lack of good-faith handling. 

I respectfully request that the CFPB require Navy Federal to : Reclassify and reopen my dispute under Regulation E ( 1005.11 ) ; Reinstate provisional credit pending a proper investigation ; and Cease the practice of misclassifying qualifying Regulation E disputes as merchant disputes to avoid compliance.

Regulatory and Legal Citations 12 C.F.R. 1005.11 ( a ) ( 1 ) ( ii ) Definition of an error includes an incorrect electronic fund transfer to or from the consumers account.

CFPB Official Staff Commentary to 1005.11 An error occurs when the transaction was not authorized as executed.

CFPB Compliance Bulletin 2014-01 Institutions may not inappropriately deny a consumer the protections provided under Regulation E by misclassifying the consumers error notice as a merchant dispute. Regulation E applies whenever a consumers account has been debited in error, regardless of whether the underlying transaction involved a merchant or other third party. 

CFPB XXXX XXXXXXXX XXXX XXXX, XXXX XXXX XXXX. XXXX ( XXXX XXXX, 2015 ) CFPB sanctioned Citizens Bank for systematically misclassifying Regulation E disputes as merchant disputes, resulting in restitution and civil penalties. 

Requested Resolution : That Navy Federal immediately reopens my claim as a Regulation E error, restores the {$580.00} to my account, and issues a written explanation acknowledging that misclassification of Regulation XXXX disputes violates CFPB guidance and federal law. 

Complainant : XXXX XXXX

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