Help! Alliant is stealing my money via wrongful right of offset

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Flobes
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Help! Alliant is stealing my money via wrongful right of offset

Post by Flobes »

I am hoping Bogleheads with knowledge and wisdom about banking, credit unions, and credit card practices can help me out of a Kafkaesque situation.

Background:
Months ago, I decided to switch from Alliant VISA Signature card (2.5% cash back, $99 annual fee) to Alliant Platinum Rewards (2%, free).

Transition was handled in October on the phone with Alliant customer service representative, near the time of my annual renewal, on the first day of the 30-day window to drop the fee card without consequences. With certitude, she assured me there would be no annual renewal fee charged.

Next statement, there’s the $99 fee on the old card account. I phone Alliant. On a 40+-minute call, CSR pulls up the recording of the initial call and my monthly statements. She summons a supervisor. Apologetically, with certitude, she assure me the fee is in error, and it will promptly be reversed. She states that it will not be visible on the account until the next statement and, per policy, she can’t send an email confirming the conversation.

Next statement, there’s the $99 fee. I call Alliant. He reads notes in my records and the transcripts. He blames those prior CSRs and says it’s definitely fixed. I share that I have some anxiety about this because I am about to leave the country for extended travels, and I will not be checking my accounts from those third-world countries. With no small amount of condescension, he laughs and tells me to relax because, he's "got this!”

I leave the country late November; I return home in January. Problem has not been fixed, and has indeed gotten worse.

[Cue the Eagles: “You can check out any time you like, but you can never leave.”]

Current status:
Alliant has escalated their efforts to collect. They assessed a $50 penalty. [Quite the mulct!] And two late payment fees (one $25, the other $27). They’ve started a harassment campaign of phone messages, a la “If you don’t call us back immediately, your world will end.”

Really big problem: Alliant is now routinely withdrawing money from my savings (aka share) account to satisfy the "debt.” Certainly, this is via their right of offset. But there is no legitimate debt, so there can be no legal right of offset.

But even their offsets are not successful. Funds are pulled from my savings and transferred to old credit card, a closed account. So money immediately rolls to new credit card. So old credit card balance (annual fee plus punishments) remains unchanged. So more money is withdrawn. Rinse and repeat. Started with four $25 transactions. Now they’re $50, on 1/16, 1/21, 1/27, 1/29, 1/31. [Ouch!]

Without any legal or legitimate claims, and certainly without my knowledge or permission or regard, Alliant is moving my money from one pocket to the other, accomplishing nothing. With each robot transfer, I am actually losing some money: interest on my share account as well cash back on my dwindling “live” credit card balances. And, of course, my money is out of my control and in the control of an out-of-control financial institution.

What to do? What to not do? Help!
I’ve been immobilized about my next step(s).

Summary: There is Alliant’s initial and acknowledged mistake of assessing the $99 annual fee for a card that was cancelled in a timely manner. And repeated failure of CSRs to remedy that mistake. And now an avalanche of egregious Alliant actions. Alliant’s computer systems have served neither them nor me.

I’m mighty reluctant to engage with customer service. Despite their earnest helpful promises, they’ve proven to be incapable of resolving the matter. I’ve already invested 100+ minutes in three phone conversations. [It’s oft said that the very definition of insanity is doing the same thing over and over again and expecting different results.]

Send a missive to Alliant’s CEO (or someone else in the Alliant chain of command)? Certified mail and/or email? This might get this to someone who can actually effectuate some action. Plus this would establish a written trail, as all of my “evidence” is the recorded calls that only Alliant can access, which they’ve already done, twice. Demands: remove the $99 plus all penalties and fees; reverse any credit bureau derogatory filings; provide me with a year of free credit so I can monitor? Am I entitled to compensation? What else?

Close my Alliant accounts? I’m hesitant as eventually they’ll need to credit my money back to me. And they might be “friendlier” if I remain a customer. I'm a long-time customer with multiple accounts. Before this pernicious episode, I genuinely liked them and their reliable friendly customer service.
Is this naive?

File a formal complaint? NCUA? Some federal department? Their state (Illinois) regulatory agency? My state regulatory agency? A consumer organization? Small claims court? Somewhere else?

What are my legal rights?

How do I escape this Orwellian nightmare? Thanks for your insights.
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8foot7
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by 8foot7 »

CFPB complaint
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Flobes
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by Flobes »

8foot7 wrote: Mon Feb 03, 2020 3:58 pm CFPB complaint
Thanks for the suggestion. Although I was unfamiliar with the acronym.

Google took me to Consumer Financial Protection Bureau. I've skimmed their complaint process. Looks promising, and my saga fits their criteria.
k3vb0t
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by k3vb0t »

CFPB + email executives here (may be outdated): https://www.elliott.org/company-contact ... dit-union/

Be clear, concise, and professional in your wording.

Have had to use this on other organizations before; typically goes to an "Executive Customer Service" team who reaches out and resolves things expeditiously.
cashheavy18
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by cashheavy18 »

k3vb0t wrote: Mon Feb 03, 2020 4:15 pm CFPB + email executives here (may be outdated): https://www.elliott.org/company-contact ... dit-union/

Be clear, concise, and professional in your wording.

Have had to use this on other organizations before; typically goes to an "Executive Customer Service" team who reaches out and resolves things expeditiously.
I'll second this recommendation and have gone this route. You usually get a response pretty quickly.
whomever
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by whomever »

FWIW: we once closed an account with one of the big name online banks. They continued to send monthly zero balance statements. After a few months I called, which took 30 min or so, and was assured it was a glitch and would be fixed. I repeated that after another few months.The statements kept coming for another couple of years, which meant shredding them, etc. Finally I took 10 minutes to compose a polite one paragraph letter to the CEO and attached the most recent statement. Three days later we got a phone message from some executive assistant saying it would be fixed, followed up by an apologetic letter, and the statements actually stopped coming.

So the letter-to-CEO route can work, and can take less time than waiting on hold :-)

CPFB sounds like another reasonable approach.
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HueyLD
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by HueyLD »

It is time to stop calling them. Rather, send all correspondence in writing.

You may want to send a letter detailing your encounters over the past several months to their SVP of Lending Jason Osterhage and cc their CEO David Mooney.
https://www.alliantcreditunion.org/about/leadership

Do not file a complaint to a government agency until you hear back from either of them.
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yangtui
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by yangtui »

I would just pay them whatever they think you owe them to stop the monthly bleeding. I would then contact them, if it is available, through your online account and try to resolve the issue. Be direct and polite. Writing a letter might be a good idea too.
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Flobes
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by Flobes »

Thanks all.
8foot7 wrote: Mon Feb 03, 2020 3:58 pmCFPB complaint
k3vb0t wrote: Mon Feb 03, 2020 4:15 pmCFPB + email executives
whomever wrote: Mon Feb 03, 2020 4:28 pm So the letter-to-CEO route can work :-) CPFB sounds like another reasonable approach.
HueyLD wrote: Mon Feb 03, 2020 4:28 pm ...send all correspondence in writing [to Alliant executives]... Do not file a complaint to a government agency until you hear back.
My new action plan is to email the executives. If they don't reply or the response is not satisfactory, I'll file a CPFB complaint.

k3vb0t wrote: Mon Feb 03, 2020 4:15 pmBe clear, concise, and professional in your wording.
There will be no mention of Eagles, Kafka, Orwell, or insanity. I'll edit all the tasty adjectives and adverbs. Alliant will pull the recordings and statements, so all that background narrative won't be necessary.

yangtui wrote: Mon Feb 03, 2020 5:02 pm I would just pay them whatever they think you owe them to stop the monthly bleeding.
This is not even a possibility. The account is closed thus not accepting payments, not even those Alliant itself is confiscating, then trying to tuck in there, way more frequently than monthly. Ergo the nexus of current plight is that it cannot be paid. The background is that the whole mess is a cascade of Alliant errors, and their people don't think I owe it but their computers do.
mpsz
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by mpsz »

Do the CFPB complaint as your next step -- don't bother contacting the executives. You've already gone through proper channels and they have failed to address your issue.
littlebird
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by littlebird »

Because of this right of offset, it is never a good idea to have both a creditor and debtor relationship with the same financial institution. This is especially true of the bank that holds your mortgage. That bank should not have any of your money which they can seize without any legal process in the event of a mix up or legitimate dispute.
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Dale_G
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by Dale_G »

Great example of haywire computer interfaces and hapless reps. I'm sure things will eventually get fixed. In the meantime, keep a smiley face, you will win in the end.

Dale
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bluebirdy
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by bluebirdy »

Would skip the executive email stuff.
CFPB complaint should get the attention fast of someone who can actually resolve this issue.
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8foot7
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by 8foot7 »

mpsz wrote: Tue Feb 04, 2020 12:04 am Do the CFPB complaint as your next step -- don't bother contacting the executives. You've already gone through proper channels and they have failed to address your issue.
bluebirdy wrote: Tue Feb 04, 2020 12:44 am Would skip the executive email stuff.
CFPB complaint should get the attention fast of someone who can actually resolve this issue.
Precisely. You've given them multiple opportunities. Stop wasting your own time.
student
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by student »

8foot7 wrote: Tue Feb 04, 2020 6:55 am
mpsz wrote: Tue Feb 04, 2020 12:04 am Do the CFPB complaint as your next step -- don't bother contacting the executives. You've already gone through proper channels and they have failed to address your issue.
bluebirdy wrote: Tue Feb 04, 2020 12:44 am Would skip the executive email stuff.
CFPB complaint should get the attention fast of someone who can actually resolve this issue.
Precisely. You've given them multiple opportunities. Stop wasting your own time.
I agree.
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Nate79
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by Nate79 »

I would try multiple channels including CFPB, exec email, and social media. There are many anecdotes online that the CFPB has been able to do nothing so I would not rely totally on them to solve your problem.
fru-gal
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by fru-gal »

Send a postal letter to the CEO. This almost always works. Keep it to one page, unemotional, rationally detail what happened.

In the last paragraph, summarize what you would like to have happen (no more charges, close card X, refund $Y and any additional unwarranted charges that this situation may result in after the date of this letter.)
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HueyLD
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by HueyLD »

Alliant is a state chartered CU with its deposits insured by the NCUSIF. So, the OP, if necessary, should file a complaint with its appropriate regulatory supervision agencies such as the IL Department of Financial and Professional Regulation and the NCUA.

It is outside of the jurisdiction of the CFPB.
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Watty
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by Watty »

littlebird wrote: Tue Feb 04, 2020 12:28 am Because of this right of offset, it is never a good idea to have both a creditor and debtor relationship with the same financial institution. This is especially true of the bank that holds your mortgage. That bank should not have any of your money which they can seize without any legal process in the event of a mix up or legitimate dispute.
+1000

I have mentioned that in other thread but I will be bookmarking your post to refer to in future threads where I mention this.
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HueyLD
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by HueyLD »

Watty wrote: Tue Feb 04, 2020 9:37 am
littlebird wrote: Tue Feb 04, 2020 12:28 am Because of this right of offset, it is never a good idea to have both a creditor and debtor relationship with the same financial institution. This is especially true of the bank that holds your mortgage. That bank should not have any of your money which they can seize without any legal process in the event of a mix up or legitimate dispute.
+1000

I have mentioned that in other thread but I will be bookmarking your post to refer to in future threads where I mention this.
Yes indeed!
wolf359
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by wolf359 »

HueyLD wrote: Tue Feb 04, 2020 9:23 am Alliant is a state chartered CU with its deposits insured by the NCUSIF. So, the OP, if necessary, should file a complaint with its appropriate regulatory supervision agencies such as the IL Department of Financial and Professional Regulation and the NCUA.

It is outside of the jurisdiction of the CFPB.
CFPB covers all financial institutions with assets of $10 billion or more. Below that, and credit unions are handled by the NCUA. Alliant was at $9.7 billion as of 2017, and their Wikipedia page says their oversight is NCUA. However, their current website claims $11 billion in assets.

They may be in between jurisdictions, being handed off between one or the other. Be ready to try both avenues.
aristotelian
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by aristotelian »

I would close the savings account and active credit card. That would keep them from pulling cash and hopefully close the loop with the credits rolling to the new card. Do you have another credit card you can use to maintain your credit rating while the mess is being sorted out?
hudson
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by hudson »

Flobes,
Did you get it resolved?
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HueyLD
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by HueyLD »

hudson wrote: Fri Apr 09, 2021 7:27 am Flobes,
Did you get it resolved?
Please update us, Flobes.
tj
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by tj »

Maybe the issues are you've been phoning them? Whenever I see an erroneous fee, I send them a secure message, they respond that it's been removed and it's been removed.
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grogu
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by grogu »

I am surprised at everyone thinking you would get anywhere with the CFPB and would be curious if you went that route and had any luck. Essentially, the CFPB just forwards your complaint to the bank, where some high-sounding office ("Office of the President") will receive it. In actuality, a low-level staffer likely will send you a form letter saying "sorry, too bad," the CFPB will then do nothing, and you will have just wasted your time. My experience has been that a complaint with the CFPB is akin to making a complaint with the do-not-call registry. Good luck with either doing anything. If you want real results you'll have to turn elsewhere.

But I would love to hear someone report a successful story with the CFPB.
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by boglegirl »

grogu wrote: Fri Apr 09, 2021 12:01 pm I am surprised at everyone thinking you would get anywhere with the CFPB and would be curious if you went that route and had any luck. Essentially, the CFPB just forwards your complaint to the bank, where some high-sounding office ("Office of the President") will receive it. In actuality, a low-level staffer likely will send you a form letter saying "sorry, too bad," the CFPB will then do nothing, and you will have just wasted your time. My experience has been that a complaint with the CFPB is akin to making a complaint with the do-not-call registry. Good luck with either doing anything. If you want real results you'll have to turn elsewhere.

But I would love to hear someone report a successful story with the CFPB.
I made a complaint to the CFPB about an attempt to collect a debt (ETA: which I did not believe I owed). The billing company very quickly sent a letter back to the CFPB informing them that my account was closed and no further amounts owed.

I'd be interested to hear the outcome of the OP's story.
H-Town
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by H-Town »

I hate to say this, but it's just $99. Does it worth all your time you put into this or your trouble? I know it's principle to some people, but is it worth it for you?

Close the account and move on.
Time is the ultimate currency.
boglegirl
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by boglegirl »

H-Town wrote: Fri Apr 09, 2021 1:13 pm I hate to say this, but it's just $99. Does it worth all your time you put into this or your trouble? I know it's principle to some people, but is it worth it for you?

Close the account and move on.
He said upthread that this wasn't possible. The account was closed and even the payments Alliant was taking from his bank account were not properly clearing the old account:
Flobes wrote: Mon Feb 03, 2020 11:30 pm
yangtui wrote: Mon Feb 03, 2020 5:02 pm I would just pay them whatever they think you owe them to stop the monthly bleeding.
This is not even a possibility. The account is closed thus not accepting payments, not even those Alliant itself is confiscating, then trying to tuck in there, way more frequently than monthly. Ergo the nexus of current plight is that it cannot be paid. The background is that the whole mess is a cascade of Alliant errors, and their people don't think I owe it but their computers do.
tj
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by tj »

grogu wrote: Fri Apr 09, 2021 12:01 pm I am surprised at everyone thinking you would get anywhere with the CFPB and would be curious if you went that route and had any luck. Essentially, the CFPB just forwards your complaint to the bank, where some high-sounding office ("Office of the President") will receive it. In actuality, a low-level staffer likely will send you a form letter saying "sorry, too bad," the CFPB will then do nothing, and you will have just wasted your time. My experience has been that a complaint with the CFPB is akin to making a complaint with the do-not-call registry. Good luck with either doing anything. If you want real results you'll have to turn elsewhere.

But I would love to hear someone report a successful story with the CFPB.
When I've filed a complaint with the CFPB, the executive office has resolved it both times. Undeposit Sign up bonuses magically appeared in my accounts. They did the research and agreed that met the requirements for the bonuses.

It's too bad that your issues weren't resolved to your satisfaction.
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by pasadena »

The CFPB seems to be the way to go. If that fails, Twitter should work :twisted:

And I would definitely close my remaining accounts with them.
tj
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by tj »

pasadena wrote: Fri Apr 09, 2021 4:11 pm The CFPB seems to be the way to go. If that fails, Twitter should work :twisted:

And I would definitely close my remaining accounts with them.
I don't believe the CFPB gets involved with credit unions.
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crinkles2
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by crinkles2 »

littlebird wrote: Tue Feb 04, 2020 12:28 am Because of this right of offset, it is never a good idea to have both a creditor and debtor relationship with the same financial institution. This is especially true of the bank that holds your mortgage. That bank should not have any of your money which they can seize without any legal process in the event of a mix up or legitimate dispute.
This is really concerning. ALL of our cash is in an account offsetting mortgage interest. Should I bank somewhere else? We would lose the return on our cash at the mortgage rate.
dukeblue219
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by dukeblue219 »

crinkles2 wrote: Sat Apr 10, 2021 6:54 am This is really concerning. ALL of our cash is in an account offsetting mortgage interest. Should I bank somewhere else? We would lose the return on our cash at the mortgage rate.
I don't really understand the situation - you have a savings or CD equal to your mortgage interest rate and can't replicate it elsewhere?

It's not the end of the word to have one bank handle both, it just opens up certain bad possibilities or headaches. I have cash at BOA along with our primary CC because the cash balance (and Merrill Edge equities) get me a high reward rate on the CC so I'll take my chances. But I'd not want them to also have my mortgage.
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by money2churn »

I'm confused as to the 'right of offset' being applied to credit card debt. From my reading it appears that credit card debt is exempt from this clause. If someone 'in the know' would clarify this it would be most appreciated.

https://www.creditcards.com/credit-card ... d-to-know/


"There also are some rigid restrictions covering the right to offset. The Federal Reserve Board’s Regulation Z, Section 226.12(d), bars financial institutions from applying the right to offset to credit card debts."



https://www.consumerfinance.gov/rules-p ... 1026/12/#d

"(1) General rule. A card issuer may not take any action, either before or after termination of credit card privileges, to offset a cardholder's indebtedness arising from a consumer credit transaction under the relevant credit card plan against funds of the cardholder held on deposit with the card issuer."
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by crefwatch »

Although I've never been late with a mortgage payment, and never knowingly late for a credit card or bill payment, I avoid having debts at places where I deposit money. Both banking and credit cards are competitive enough businesses that I can get rates that are satisfactory to me without risking "offset" rights. It's true that I never chase signing bonuses or asset/debt transfer deals.
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crinkles2
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by crinkles2 »

dukeblue219 wrote: Sat Apr 10, 2021 7:09 am
crinkles2 wrote: Sat Apr 10, 2021 6:54 am This is really concerning. ALL of our cash is in an account offsetting mortgage interest. Should I bank somewhere else? We would lose the return on our cash at the mortgage rate.
I don't really understand the situation - you have a savings or CD equal to your mortgage interest rate and can't replicate it elsewhere?

It's not the end of the word to have one bank handle both, it just opens up certain bad possibilities or headaches. I have cash at BOA along with our primary CC because the cash balance (and Merrill Edge equities) get me a high reward rate on the CC so I'll take my chances. But I'd not want them to also have my mortgage.
I have a checking account of balance X.

The mortgage balance is Y. Mortgage payment is calculated based on original loan balance.

Interest on the mortgage is calculated on the amount of (Y - X).

So in effect my cash is saving me mortgage interest at the mortgage rate.
dukeblue219
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by dukeblue219 »

crinkles2 wrote: Sun Apr 11, 2021 3:32 am
I have a checking account of balance X.

The mortgage balance is Y. Mortgage payment is calculated based on original loan balance.

Interest on the mortgage is calculated on the amount of (Y - X).

So in effect my cash is saving me mortgage interest at the mortgage rate.
What sort of financial instrument is this? It's unlike any mortgage I've ever heard of.... (which isn't to say such things don't exist)
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crinkles2
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by crinkles2 »

Sorry, I live in Australia. These are called offset accounts. Realise they may not be common or available in the US. However, the right of offset principle still concerns me.
cat_guy
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by cat_guy »

Flobes wrote: Mon Feb 03, 2020 11:30 pm My new action plan is to email the executives. If they don't reply or the response is not satisfactory, I'll file a CPFB complaint.
Would be interested to hear how/if this got resolved and if you are still with Alliant or recommend we avoid them 😅
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Re: Help! Alliant is stealing my money via wrongful right of offset

Post by Cyclone »

Alliant is subject to CFPB supervisory authority, according to the CFPB website. But first I would try the letter to the CEO, then the NCUA (the primary regulator). Complaints to the CFPB normally get routed to the primary regulator, if any.
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