On October 11, just one month before Veteran’s Day, the Consumer Financial Protection Bureau (CFPB) ordered Navy Federal Credit Union to pay military family customers approximately $23 million for improper debt collection practices. They were also ordered to pay $5.5 million in civil money penalties. The CFPB investigation found that between January 2013 and July 2015 the Navy Federal Credit Union violated the Dodd-Frank Wall Street Reform and Consumer Protection Act by using deceptive actions to collect debt from their customers, which include active military, veterans and their families.
Navy Federal Credit Union To Military Family Members
The CFPB found that the Navy Federal Credit Union:
- Unfairly restricted access to about 700,000 of their customers’ access to their electronic credit union accounts by freezing them out.
- Implied to its customers that they would cut or raise their credit score and made other false threats to about 68,000 customers that they would find it “difficult or impossible” to get additional credit since they were behind on their payments to NFCU.
- Falsely threatened 115 of their customers that their commanding officers would be notified about their delinquent payments, although there is no evidence that NFCU did this or had the authority to do this. These 115 customers will receive $1,000 each. This was a significant finding, as credit problems in the military can result in the revocation of security clearance or disciplinary proceedings.
- Threatened their customers with wage garnishment and that they needed to “pay or be sued”, which was found to be inaccurate 97% of the time.
As a result of Navy Federal Credit Union’s improper debt collection practices, they have been ordered to contact their customers who are eligible for compensation and pay their victims approximately $23 million. In addition, NFCU is required to pay the CFMB a $5.5 million Civil Penalty Fee. NFCU is also ordered to come up with a comprehensive plan on how it will communicate in the future with its customers regarding delinquent debt.
The Consumer Financial Protection Bureau offers service members information on knowing their rights when a debt collector calls. NFCU consumers are encouraged to contact the CFPB with questions or concerns. It’s comforting to know the CFMB is watching out for our active military, veterans and their families. And that they received a victory right before Veteran’s Day!
Unfair and deceitful debt collection practices are all too common. If you have been threatened with a wage garnishment, bank levy or a lawsuit; you have options. Whether you are in the military or not, no one deserves to be taken advantage of. Especially when you are already vulnerable with delinquent debts. Contact the San Diego based Gamez Law Firm for a free debt consultation and to learn your rights.
Daniel R. Gamez, an attorney focusing exclusively in debt relief, is licensed to practice in all state and federal courts in California and Texas. Mr. Gamez owns and operates the Gamez Law Firm in San Diego, CA. For more information, please contact Daniel Gamez at 858-217-5051, firstname.lastname@example.org or use our online contact form. Stay updated with the latest debt relief tips by following on Facebook and Twitter!