Consumer complaint received 2021-06-22
Company: DISCOVER BANK
State: TX
Product: Credit reporting, credit repair services, or other personal consumer reports
Sub-product: Credit reporting
Issue: Incorrect information on your report
Sub-issue: Account status incorrect

Complaint:
On XX/XX/2021 I lost my wallet at a gas station and upon receiving a message from Discover that I reported my card lost or stolen, which I did not, I contacted them and was told that someone found my card and wanted my # to contact me and was planning on dropping off my wallet to my leasing office, which he did. Since they were unable to supply my personal info, they took precaution and reported it lost or stolen on my behalf but when they did that, a new account number was created and reported to my credit with my current balance during my statement cycle. I have kept my utilization under 10 % at the time balance is reported to the credit bureaus on the XXXX of each month. I am not sure why they would report someone's balance during a statement cycle and before the payment is due knowing that the card may have been used. My score decreased by 72 points and they said the only alternative was to make an early payment so that they could report the new balance sooner than later but the update will not raise my score 72 points to its original score. The purpose of the Discover IT card is to help rebuild one 's credit so why when a card is reported lost or stolen, the account is submitted to the credit bureaus with the current balance which hurts one 's credit? 


My basis for this complaint are based on the below : Unfair Acts or Practices 2 ) The injury is not reasonably avoidable by consumers : I am unable to have my credit rescreened for a lower auto insurance premium and will have to pay a higher premium due to a new vehicle that I purchased. 
I will not be able to apply for loans, etc while I am in school due to the significant drop in my credit score.

I was unable to avoid this situation because when my card was lost at a gas station, a customer found it and called Discover to try and get my information to contact me to retrieve the wallet. Discover took it upon themselves to report lost without notifying me. The customer was nice enough to use the address on my DL to drop it off at my leasing office but could have decided to not do anything if he did not want to take the effort to drive to the leasing office. This was also not reasonably avoidable because the Credit Reporting and Unauthorized Use section of the cardholder agreement does not state that if ( in this situation ) someone calls on a customers behalf to report it lost/stole that Discover will close the account, open a new open a new one and then report the current balance to the credit bureaus during a statement cycle which will have a negative effect on the credit score and utilization. 

Discovers current policy is deceptive due to the omission of the procedure and the fact that that it was acknowledged by 2 executive parties that they were unaware of this sort of complaint and the credit liability it has on its customers. The lack of information on the cardholder agreement and website is more than likely to mislead consumers. As noted on a phone call with XXXX, the Discover executive and the response received in a BBB complaint filed, Discover agrees that my reaction to their policy is reasonable and understandable and unavoidable due to their lack of disclosing their lost/stolen credit card policy. 

This act or practice is abusive because there is ( according to Discover ) no remedy to this situation.

Company response to consumer: Closed with explanation