VIENNA, Va. — Navy Federal Credit Union has agreed to cancel qualifying personal loans, refund payments and provide additional $250 payments under a proposed settlement of a lawsuit alleging fraudsters obtained loans in members’ names, according to court filings.
The settlement covers approximately 1,607 members, according to a July 10 order granting preliminary approval. U.S. District Judge Arenda Wright Allen scheduled a final approval hearing for Dec. 9 in Norfolk. The agreement remains subject to final court approval.
Navy Federal denies wrongdoing and liability, according to the settlement agreement. The court’s preliminary approval order does not determine whether the credit union committed any wrongdoing.
The lawsuit, filed by Stacy Edey, Kellie High and Ronnice Lee in September 2025, alleges Navy Federal approved unauthorized loans without adequately verifying applicants’ identities. According to the complaint, fraudsters applied through unfamiliar devices and used email addresses that did not belong to the members.
Callers Posed as Employees
After loan proceeds appeared in members’ accounts, callers posing as Navy Federal employees instructed them to transfer the money, purportedly to correct deposits made in error, the complaint alleges. Members later learned the deposits were loan proceeds. The plaintiffs allege Navy Federal rejected their fraud claims and demanded repayment.
Under the agreement, the $204-billion Navy Federal would cancel eligible disputed debts and reimburse payments, including money it took from members’ accounts to repay the loans. It also would request deletion of related credit reporting and loan application inquiries from Equifax, Experian and TransUnion, according to the settlement filing.
The settlement applies to qualifying loans provided between Jan. 1, 2023, and Jan. 31, 2025. According to the settlement administrator, eligibility requires that applications came from unfamiliar devices, proceeds were deposited into members’ accounts, members disputed the loans as fraudulent, Navy Federal denied those disputes in whole or part, and the loan funds were not fully recovered.
What Eligible Members Must Do
Eligible members do not need to file claims to receive the automatic relief. They must submit a claim form by Nov. 29 to receive an additional $250, according to the court-authorized settlement website. The deadline to request exclusion or object is Nov. 9.
Class attorneys plan to request $250,000 in fees and expenses and service awards of up to $15,000 for each named plaintiff. Those amounts require court approval and would be paid separately without reducing members’ benefits, according to the settlement administrator.
