The latest enforcement action handed out by the Consumer Financial Protection Bureau was again focused on debt collection. This time, the action involved Navy Federal Credit Union.

The bureau specified four activities deemed to be improper debt collection actions that triggered a $28.5 million penalty. The CFPB charged Navy Federal Credit Union with these infractions:

1. Falsely threatened legal action and wage garnishment

Bureau officials said the credit union sent letters to members threatening to take legal action unless they made a payment. But in reality, the CFPB said the institution seldom took any such actions.

The CFPB found that the credit union’s message to consumers of “pay or be sued” was inaccurate about 97 percent of the time, even among consumers who did not make a payment in response to the letters. The bureau asserted the credit union’s representatives also called members with similar verbal threats of legal action. And the credit union threatened to garnish wages when it had no intention or authority to do so.

2. Falsely threatened to contact commanding officers to pressure servicemembers to repay

The regulator indicated the credit union sent letters to dozens of servicemembers threatening that the credit union would contact their commanding officers if they did not promptly make a payment. The CFPB added that the credit union’s representatives also communicated these threats by telephone.

For members of the military, officials explained consumer credit problems can result in disciplinary proceedings or lead to revocation of a security clearance. They added the credit union was not authorized and did not intend to contact the servicemembers’ chains of command about the debts it was attempting to collect.

3. Misrepresented credit consequences of falling behind on a loan

The CFPB indicated the credit union sent about 68,000 letters to members misrepresenting the credit consequences of falling behind on a Navy Federal Credit Union loan. Many of the letters said that consumers would find it “difficult, if not impossible” to obtain additional credit because they were behind on their loan. But the credit union had no basis for that claim, as it did not review consumer credit files before sending the letters.

The regulator went on to mention the credit union also misrepresented its influence on a consumer’s credit rating, implying that it could raise or lower the rating or affect a consumer’s access to credit. As a furnisher, the credit union could supply information to the credit reporting companies but it could not determine a consumer’s credit score.

4. Illegally froze members’ access to their accounts

Bureau officials also mentioned the credit union froze electronic account access and disabled electronic services for about 700,000 accounts after consumers became delinquent on a Navy Federal Credit Union credit product. This meant delinquency on a loan could shut down a consumer’s debit card, ATM, and online access to the consumer’s checking account.

The only account actions consumers could take online would be to make payments on delinquent or overdrawn accounts, according to the CFPB.

According to the CFPB’s news release, Navy Federal Credit Union is correcting its debt collection practices and will pay roughly $23 million in redress to victims along with a civil money penalty of $5.5 million.

“Navy Federal Credit Union misled its members about its debt collection practices and froze consumers out from their own accounts,” CFPB director Richard Cordray said. “Financial institutions have a right to collect money that is due to them, but they must comply with federal laws as they do so.”