Consumer complaint received 2023-07-19
Company: Bread Financial Holdings, Inc.
State: CA
Product: Credit card or prepaid card
Sub-product: Store credit card
Issue: Problem when making payments
Sub-issue: Problem during payment process

Complaint:
Hello, I have an XXXX credit card issued by Comenity Capital Bank. This is not a kind of Visa or MasterCard credit card to use everywhere but a one to use to pay services at a dentist office. 

I have two claims to present against this bank as detailed below. I called over the phone to the CFPB to ask if I can present both claims at the same time and the agent who took my call told me it is ok as long as both are for the same company, what is this case. 

FIRST CLAIM Brief : Comenity promised to offer a 6-month promotion plan to pay a balance with deferred interest but it is offering only 5 months to do it because it missed to include the transaction in the first statement. 

Explanation : On XX/XX/XXXX the card was used to pay for services. The total charge for this transaction was {$4000.00} with a promotional plan of deferred interest for 18 months with a minimum payment required every month. Balance for this transaction must be paid in full by XX/XX/XXXX to avoid paying accrued interest charges since the transaction day. 

On XX/XX/XXXX the card was used a second time to pay for services. The total charge for this second transaction was {$690.00} with a promotional plan of deferred interest for 6 months with a minimum payment required every month. Balance for this transaction must be paid in full by XX/XX/XXXX to avoid paying accrued interest charges since the transaction day. 

The first paper statement received had a due date by XX/XX/XXXX to make the first payment. The statement closing date was XX/XX/XXXX. However, the second transaction charged was not included in this statement. The total balance in the paper statement showed up only the amount of {$4000.00} related to the first transaction although the second transaction was charged on time by the statement closing date. Then, the second transaction should appear in the paper statement too. 

On XX/XX/XXXX ( by the due date ) I went online to the XXXX credit card site to make a payment and the account showed up a total balance of {$4700.00} including the first and the second transaction ( although paper statement included only first transaction ). 

I knew the ending date for the 6-month promotion plan by the time I received the second paper statement with a due date of XX/XX/XXXX. That second statement shows the 6-month promotion plan ends on XXXX, XXXX. However, because that transaction was not included in the first statement, they are taking away one month of the promotion plan and giving only 5 months to pay with deferred interest ( XXXX, XXXX, XXXX, XXXX and XXXX ) instead of the 6-month plan as promised. 

I called XXXX credit card over the phone and spoke with an associate to explain what happened regarding the one missing month in the plan. The associate told the second transaction was not showing up in the first statement because the purchase was made on the same cut day when the statement closes. Then I told the associate that if the transaction was not originally included in the statement, then the promotion plan should be end by XX/XX/XXXX instead of XXXX, XXXX in order to have a 6 months promotion plan as promised. The associate told me there was nothing she could do to extend the promotion by one month because of the missing month. She told me the promotion plan will end by XXXX. I told the associate that it was not fair to the customer because Comenity did not include the second transaction on the statement but it is taking away the first month of the promotion plan ( XXXX ). The associate told me again there was nothing she could do about it. 

Key issues on this claim : - A purchase was made on time withing the timeframe for the statement to be close. 
- The purchase has a 6-month plan to pay with deferred interest. 
- The purchase was not included in the first statement although it was made before the statement closing. 
- As a result, one month is missing from the 6-month promotion plan as the promotion will end 5 months after the transaction was reflected on the statement. 
- An associate told me she was not able to do anything about it. 

How to resolve this : - Comenity must grant the full 6-month promotional plan as promised allowing the customer to pay with deferred interest until XX/XX/XXXX instead of XX/XX/XXXX to reflect a 6 month promotion plan instead of a 5 month plan. 

SECOND CLAIM Brief : Comenity is not allowing the customer to allocate the payments in exceed of minimum payment to the promotion ending first as requested by the customer to avoid paying accrued interest by the end of the promotion. Allocation of payment rules allow a customer to do that if requested. Comenity is not following that request and is allocating the amount in exceed of minimum payment to the promotion ending the latest. 

Explanation : The minimum payment due on XX/XX/XXXX was XXXX. To calculate the minimum payment, Comenity took only in consideration the first transaction on XX/XX/XXXX for the amount of {$4000.00} with a promotional plan of 18 month with deferred interest. However, by XX/XX/XXXX the total balance showed up in the account online was {$4700.00} including the second transaction made on XX/XX/XXXX for the amount of {$690.00} with a 6-month promotional plan as told at the time to make the purchase. 

I divided the balance for each promotion by the number of months offered to pay with deferred interest with the following result : XXXX / XXXX = XXXX ; XXXX / XXXX = XXXX. Then I decided to make a payment of {$340.00} ( XXXX + XXXX ) on XX/XX/XXXX to cover both promotions even when the 6-month plan was not showing up in the paper statement but the amount was already included in the total balance by the time to pay online. Minimum payment was {$140.00} and payment sent was {$340.00} ( {$200.00} more ). 

I called customer service requesting to allocate {$220.00} out of the {$340.00} to pay the 18-month promotion balance and {$110.00} to pay the 6-month promotion balance. I wrote down in my personal notes that the balances for each promotion in the next statement should be {$3800.00} and {$580.00} for the 18 and 6 promotion plans respectively. 

To my surprise, the second statement came up with a balance of {$3700.00} for the 18-month promotion plan and a full balance of {$690.00} for the promotion ending in XXXX, XXXX. Comenity did not allocate the payment as requested by the customer as the 6-month promotion plan balance did not receive a penny to be paid. Instead of following the customer request, Comenity allocated the {$340.00} payment in full to the 18-month plan and charged the 6-month plan balance in the second statement that was missed to include in the first statement. 

I called customer service to find out why the allocation was not made as requested. The associate who took my call told me the payments are allocated automatically by the system. I asked the associate to handily allocate the payment as it was requested. The associated told me she was unable to manipulate that or make any changes as payments are processed automatically. I told the associate that the allocation of payment rules allow the customer to allocate the payment as desired by the customer. The associate insisted she was not able to help. 

For the second statement, the minimum payment due was {$150.00} on XX/XX/XXXX. I asked the associate to know how much of the minimum payment will cover each promotion. The associate told me that {$77.00} out of {$150.00} will be applied to the 18-month promotion plan and the remaining {$77.00} will be applied by the 6-month promotion plan. The associated also told me that any amount paid in exceed of the minimum payment will be allocated to pay the 6-month promotion plan. I found out later that was not true as Comenity did not proceed that way. 

I scheduled a payment again of {$340.00} for XX/XX/XXXX and ask the associate to please be sure that the system allocates {$220.00} to the 18-month promotion balance and {$110.00} to the 6-month promotion plan. The associate told me that I should not have a reason to be concerned as payment will be processed that way. 
Again, to my surprise, when I receive the third statement the payment was not allocated that way as requested by the customer. The XXXX statement to be paid on XX/XX/XXXX shows a balance of {$3300.00} for the promotion with a 18 month plan and a balance of {$670.00} for the promotion ending in XXXX, XXXX. 

I called customer service again to find out why for the second time the allocation of payment was not made as requested by the customer after having one of the associates affirming me that the exceed in the minimum payment would be allocated to the promotion ending first. The associate who took my call told me she had no explanation about it as payments are processed automatically. Then I ask to please allocate the payments as it was requested. I explained that was the second time having that issue. The associate told me she was not able to help me out because she can not handle payments manually. I asked to talk to a supervisor. A supervisor took my called and told me the same thing. The supervisor told me payments are allocated automatically by the system and he had no way to make allocations in a different way. I explain the supervisor what the 1026.53 ( b ) ( 1 ) ( ii ) rule states about allocation of payments requested by customer on a deferred interest plan. He asked me to contact XXXX credit card directly throughout the message center in my account and write my concerns. I did it. Please, see the attachment to read the messages back and forth between Comenity and my self about the dispute. Even after I explained the problem thru the secure message center, and even after sending the rule about the right for customers to allocate payments as requested, Comenity replied time after time that they process payments automatically and payments are allocated first to the promotion ending the latest. 

By doing that, the promotion ending first will start to show interest accrued since the transaction date by the time the promotion is over because payments are not allocated that way. 

I requested several times now over the phone and over internet to allocate the exceed of minimum payment to the promotion ending first by XX/XX/XXXX and Comenity is not following that request nor that rule. Such as rule in the CFPB site states that the card issuer may at its option allocate any amount paid by the consumer in excess of the required minimum periodic payment among the balances on the account in the manner requested by the consumer. Comenity is not doing that as requested by the customer. 

In the last message received by a supervisor, Comenity states the following : Comenity Capital Bank has opted to not allocate a payment different than what is systematically in place. 

After being in communication with Comenity and after several tries to allocate the payment in a way requested by the customer without success, I am filing this claim against Comenity in order to resolve the dispute and to allow the customer to allocate the payments as requested pursuant to 1026.53 ( b ) ( 1 ) ( ii ) Key issues on this claim : - Comenity offered a 18 month promotion plan for a balance with deferred interest and a 6 month promotion plan for a balance with deferred interested. 
- Customer sent payments well over the minimum payment to allocate money to the promotion ending first. 
- Customer reached out Comenity over the phone and over internet to request allocation of payments to the promotion ending first. 
- Comenty is not following the request of customer. 
- Promotion ending first have received only {$24.00} towards balance after payments sent for a total of {$230.00} beyond the minimum payment. 
- Customer has the right to allocate the payment in excess of minimum payment to the promotion ending first, but Comenity continue to apply most of the payment to the promotion ending the latest, which will result in interest to be charged since the transaction date by the time the promotion ending first is over. 

How to resolve this : - Grant the customer from now on to allocate the payments as requested to pay off first the promotion ending first. 
- Adjust the balance retroactively for each promotion by allocating the payments already sent as requested by the customer since the beginning of payments. 

Please, see attached the messages throughout the Comenity secure message center and the statements received so far. 

Comenity Capital Bank is part of XXXX XXXX XXXX Accounts are issued by Comenity Capital Bank. Customer care line is XXXX Customer care for XXXX credit card customers is XXXX COMENITY.NET/XXXX XXXX XXXX XXXX XXXX TX XXXX

Company response to consumer: Closed with explanation