All About USAA Lawsuits

Learn what USAA lawsuits are out there, and how to take action…

USAA is a prolific financial services company with a long history of offering services to service members. Still, some customers complained about things like potential fraud issues with USAA accounts or hidden USAA fees on their statement. You might think that your only recourse is to contact USAA customer service and hope for a resolution but you can file a complaint against USAA officially. But what about lawsuits?



Are lawsuits allowed against USAA?

If you take a look at your user agreement with USAA, you’ll probably find text that prohibits you from suing USAA except in small claims court because of an arbitration clause. Small claims court can be very complicated because you have to do everything yourself, not to mention time-consuming with all those trips back and forth to the courthouse. That is why consumer arbitration is a great alternative.


What is a Class Action Lawsuit? Can I file a Class Action Lawsuit against USAA?

Class action lawsuits are single lawsuits that represent a group of people who all have the same complaint. You might not be able to file a class action lawsuit against USAA if you have an arbitration clause in your user agreement or contract. Sometimes government agencies or regulatory bodies, even former employees bring class action lawsuits against big banks like USAA because they are not prohibited through arbitration clauses.


As a USAA customer, what are my options for a lawsuit?

Your first option is to use small claims court. With small claims court you have to fill out all the paperwork, submit it with your local courthouse, and attend a hearing. Your case may or may not qualify depending on where you live. Alternatively you can use consumer arbitration. With consumer arbitration you present your side before an independent arbitrator instead of a judge and that arbitrator can make a final decision and force USAA to fix the problem.


Recent and notable USAA lawsuits:

USAA lawsuit over salvaged vehicles

A class action lawsuit was filed in Texas against USAA on behalf of policy holders whose vehicles were considered total losses by USAA insurance department, with registrations revoked and vehicles titled as non-repairable or salvage without owner consent. USAA allegedly appraised the value of cars and when determining that it would cost more money to fix the car compared to the value of the car, deemed it a total loss without owner consent. 

USAA lawsuit over life insurance

USAA faced another lawsuit in Texas where it settled in August of 2021 $90 million. In this case it was alleged that USAA Life Insurance systematically overcharged certain policyholders, especially those who had universal life insurance policies. universal life insurance policies did not come with fixed premium monthly rates and change based on the market conditions. This lawsuit alleged that USAA overcharged policyholders with inflated rates outside of the factors legally allowed which extends to age, sex, and rate class.

USAA lawsuit over debt collection

One customer sued USAA over unfair debt collection procedures. Henry Holmes, a resident of Georgia, filed a lawsuit in Nevada federal court stating that between February 11th and June 30th you received over 125 calls from USAA, interrupting his work, calling multiple times per day, and violating the telephone consumer protection act. In a similar case, also filed in the District Court of Nevada, an Arkansas resident alleged that USAA violated the telephone consumer protection act by calling her at least 100 times between February and June to collect on an alleged debt. Covid and a divorce and interfered with her work schedule so in spite of being asked to only be contacted by mail, multiple calls happen every day.

USAA lawsuit over insurance profits

A lawsuit in 2022 alleged that USAA profited unfairly during the pandemic. A car insurance customer sued USAA saying that they charged customers high insurance premiums during the pandemic even when customers were not driving. This case was presented in the state of California. The lawsuit found that there was a dramatic reduction in driving which meant a dramatic reduction and driving related accidents because of stay at home orders and yet premiums were not significantly reduced as a direct result when they should have been.

USAA agency penalties

Remember how government agencies and regulatory bodies are usually the ones who bring class action lawsuits against big banks like USAA? 

That’s exactly what has happened multiple times. USAA Federal Savings Bank faced a charge by the CFPB in 2019 for a consumer protection violation and was charged with a penalty over 15 million dollars. The OCC levied another banking violation charge against USAA Federal Savings Bank in 2020 with a penalty of 85 million dollars.

In 2018 the state of Virginia issued an insurance violation against USAA Casualty Insurance to the tune of 4 million dollars. In Massachusetts in 2010, a consumer protection violation was put against the USAA automobile Department with a fine of 2 million dollars.

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