A US lender has agreed to pay $1.7 million to current and past customers who reported losing money to fraud but were never reimbursed.
According to the settlement administrator’s portal, Navy Federal Credit Union is settling a lawsuit and handing cash to customers whose claims were denied over a three year period.
Settlement class members will receive a pro rata share as a settlement for the claims, while the class representatives will receive a further “service award” payment of $5,000 each.
Customers of Navy Federal Credit Union who submitted a claim for unauthorized or fraudulent transactions to the lender that was denied between October 10th of 2022 and August 20th of this year are eligible for the payment.
Claims must be submitted by December 18th.
The final approval hearing will be held on February 4th of 2026.
The class action lawsuit was originally filed in October of 2023.
The suit accused Navy Federal Credit Union (NFCU) of “improperly denying” claims that unauthorized transfers had been made from customers’ accounts without offering “sufficient written” explanations for the negative responses.
According to the lawsuit, NFCU placed the burden of proving fraud on its customers.
“NFCU denies fraud claims it unilaterally deems to be ‘unsupported’ or that ‘no error has occurred’ without providing any substantive explanation as to how or why it has satisfied its burden of demonstrating that the disputed charges were authorized.
In practice, this creates an NFCU versus the consumer system in which NFCU always wins. This is precisely the type of system federal law was designed to prevent.”
Although the lender has agreed to the settlement, Navy Federal Credit Union denies violating the law or engaging in any wrongdoing.
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