Navy Federal Loan Fraud Settlement: Cancellation, Refunds Plus $250 Claim

A lawsuit alleges that Navy Federal Credit Union failed to prevent scammers from opening unauthorized personal loan accounts in members' names, and then failed to cancel those loans after impersonators posing as Navy Federal staff tricked members into wiring the loan funds to unknown third parties. Navy Federal denies any wrongdoing and has moved to dismiss the case; the Court has not ruled on the merits. Instead, the parties have agreed to settle, and the settlement has received preliminary approval, with a final approval hearing scheduled to determine whether it's fair.

If you're a class member, three things happen automatically, with no action required: your qualifying loan is canceled, Navy Federal asks credit bureaus to remove related credit reporting, and any payments you made on the loan are refunded to your Navy Federal deposit account (or mailed to your last known address if you no longer have an account there).

Beyond that automatic relief, you can claim an additional $250 by submitting a Claim Form before the deadline. The form requires your signature certifying that an unauthorized personal loan was opened using your Navy Federal membership and that you suffered additional damages, no extra documentation or proof is needed. The form also lets you update your name, address, phone, or email if incorrect.

To find out if you qualify, check the Notice mailed or emailed to you by Navy Federal's settlement administrator, which includes your loan account number, refund amount, and a Claim Form as its last page. The administrator may follow up if additional information is needed.