{"id":119189,"date":"2019-01-03T23:44:31","date_gmt":"2019-01-03T23:44:31","guid":{"rendered":"https:\/\/one.sightlinemg.com\/militarytimes\/uncategorized\/2019\/01\/03\/usaa-customers-to-receive-more-than-12-million-for-alleged-violations-in-handling-accounts-errors\/"},"modified":"2026-08-08T13:53:09","modified_gmt":"2026-08-08T13:53:09","slug":"usaa-customers-to-receive-more-than-12-million-for-alleged-violations-in-handling-accounts-errors","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/militarytimes\/management\/pay-benefits\/2019\/01\/03\/usaa-customers-to-receive-more-than-12-million-for-alleged-violations-in-handling-accounts-errors\/","title":{"rendered":"USAA customers to receive more than $12 million for alleged violations in handling accounts, errors"},"content":{"rendered":"\n

USAA Federal Savings Bank will pay more than $12 million to 66,240 military, retiree and veteran account holders to resolve various allegations relating to members\u2019 accounts and resolving errors, in a settlement reached this week with the Consumer Financial Protection Bureau<\/a>.<\/p>\n\n\n\n

The CFPB alleges that USAA failed to properly resolve errors; failed to honor members’ requests to stop preauthorized payments through Electronic Fund Transfers; and that it reopened accounts without members\u2019 authorization and without notifying them.<\/p>\n\n\n\n

The bureau found the alleged violations during a review <\/a>of the bank\u2019s practices.<\/p>\n\n\n\n

Under the settlement, filed Jan. 3, USAA will pay $181.59 each to the 66,240 members allegedly denied a reasonable investigation of the error they reported. USAA will also pay the Consumer Financial Protection Bureau a $3.5 million fine.<\/p>\n\n\n\n

USAA neither admits nor denies the allegations, according to the consent order.<\/p>\n\n\n\n

The consent order notes that USAA has been addressing the issues, including changing some policies and procedures in 2015 and 2016. Information was not immediately available about when the CFPB review began.<\/p>\n\n\n\n

\u201cUSAA has been proactively addressing these issues for more than a year and most are resolved,\u201d said USAA spokesman Matt Hartwig in a statement provided to Military Times.<\/p>\n\n\n\n

In 2017, he said, \u201cwe began providing restitution payments to some affected members, and improved our procedures.<\/p>\n\n\n\n

“None of the issues reflect an intention to take advantage of our members. In fact, we believed our processes would help resolve matters faster. We take responsibility for this situation.\u201d<\/p>\n\n\n\n

CFPB alleged that USAA refused to investigate errors in some cases. Until the policy changed in May 2015, the bank didn\u2019t investigate reported errors unless the consumer submitted a \u201cwritten statement of unauthorized debit\u201d within 10 days after USAA sent the form to the consumer.<\/p>\n\n\n\n

USAA also had a separate procedure for those disputing an error regarding a payday loan<\/a>, requiring the consumer to contact the payday lender to dispute the transaction.<\/p>\n\n\n\n

\u201cOn numerous occasions, USAA representatives refused to investigate errors because they concerned payday loans,\u201d the consent order stated.<\/p>\n\n\n\n

The procedure also required the consumer to have the written report notarized if the error involved a payday lender.<\/p>\n\n\n\n

While the Military Lending Act concerning limitations on payday loans applies to active duty members and dependents, it doesn\u2019t apply to military retirees and veterans, who are also eligible to be members of USAA.<\/p>\n\n\n\n

USAA also didn\u2019t have a procedure requiring that a reasonable investigation be conducted when a consumer notified them of a suspected error. CFPB noted that in numerous instances when the bank found no error, \u201ca reasonable review of all relevant information within the bank\u2019s own records would have resulted in a determination in favor of the consumer.\u201d<\/p>\n\n\n\n

Thus, CFPB contends, these practices resulted in USAA\u2019s failure to adequately address the unauthorized or incorrect transactions, as is required by law.<\/p>\n\n\n\t