Former credit union executive alleges hidden fees, cover-up
Last Updated: 39 days ago
SAN DIEGO - 10News has uncovered new information Wednesday evening about how the largest local credit union allegedly overcharged thousands of customers in hidden fees.
Promoted in 2007, Scott Norris worked as an executive vice president for San Diego County Credit Union. He was let go this past May.
"He was a well-paid executive who was fired for doing the right thing," said attorney Josh Gruenberg, who is representing Norris.
Gruenberg says the right action began with uncovering wrong numbers.
According to a just-filed lawsuit, the problems started in 2005, when the company used a computer system that was not designed to handle mortgage payments.
Gruenberg says things went bad for customers who made a late mortgage payment.
The lawsuit alleges the late fees were not included in the mortgage statements, but in fact, those late fees were being applied.
Gruenberg says the fees were being applied against the principal, meaning homeowners were not paying down as much on their homes as they intended to, leading to homeowners being charged more interest on their home loans.
How much? Norris says in 2010, he told SDCCC president Teresa Halleck 2,000 customers may be impacted, requiring some $500,000 in refunds.
A month later, letters were sent out that led to refunds, but Norris says they were only partial and they were sent out using his copied signature and without his approval.
"In the letters, San Diego County Credit Union blamed it on computer error, which was not true," said Gruenberg.
Norris says Halleck tried to hide the truth from members – that leaders knew they were using the wrong system for five years and did nothing.
"The evidence will be brought up that Scott brought this up in board meetings and when it was brought up, the secretary in charge of minutes was asked to leave the room. That is highly suspicious," said Gruenberg.
Norris says when he voiced concerns about this and other issues, he was fired.
The lawsuit refers to an anonymous complaint leading to a federal investigation.
The National Credit Union Administration, the agency that oversees credit unions, declined to comment.
A spokesperson for the San Diego County Credit Union did not return 10News' calls for a comment.
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