Virginia Senator Presses Navy Federal To Provide Relief To ‘Parking Lot Scam’ Victims
By CU Today Staff —
VIENNA, Va.—A Virginia state senator is pressing Navy Federal Credit Union to provide relief to members who say they are being required to repay personal loans fraudulently opened through their mobile phones—some carrying interest rates of 18%, WTKR reported.
State Sen. Bill DeSteph, a Republican representing Virginia’s 20th District, said he has discussed the problem several times with leaders of the $204-billion Navy Federal and also contacted NCUA, Virginia regulators and banking and credit union trade groups.
“Everyone I've talked to knew it was a problem. Every single one of the individuals at every level knew this was a problem,” DeSteph told WTKR.
Federal prosecutors call the fraud the “parking lot scam.” Criminals approach victims in public places, persuade them to hand over their phones and then access financial apps to apply for personal loans and transfer the proceeds. Federal court records show one prosecution involved 10 defendants and allegations including wire fraud, bank fraud and money laundering. Authorities have documented more than 500 victim reports and at least $2 million in losses.
WTKR reported several victims said Navy Federal continued holding them responsible for the fraudulent debt after they filed claims. Attorney Gary C. Byler, who represents approximately 50 alleged victims, said he has filed four individual lawsuits and sent numerous demand letters. Some claims produced settlements or checks, but others were rejected or received no response, according to Byler, who said additional lawsuits may follow.
“Due to privacy considerations and pending litigation, we are unable to provide information regarding these matters,” Navy Federal said in a statement to WTKR. “Please be assured that Navy Federal takes fraud and scam-related activity very seriously and complies with all applicable laws and regulatory requirements when investigating and resolving such claims. Each claim is evaluated based on its unique facts and circumstances. Navy Federal also cooperates with law enforcement, as appropriate.”
The credit union separately advised members never to open a banking app before handing their phone to a stranger.
DeSteph said Navy Federal’s response does not address relief for members and suggested the speed and ease of obtaining personal loans may leave too few safeguards against fraud. He said he may introduce legislation if the issue remains unresolved but would prefer voluntary action by the member-owned credit union.
“Legal is one level. Doing what's right is a higher standard. Let's do what's right. Let's fix this,” DeSteph told WTKR.
Originally reported by CU Today.