Consumer complaint received 2017-11-30
Company: DISCOVER BANK
State: ID
Product: Student loan
Sub-product: Private student loan
Issue: Dealing with your lender or servicer
Sub-issue: Trouble with how payments are being handled

Complaint:
On XXXX/XXXX/XXXX, I accessed my account to to make sure that I did not need to submit paperwork regarding my student loan interest in anticipation of filing my taxes in XXXX. I noticed that my loan balances had been increasing every month for several months, and then I noticed that my account was in deferment. After checking my statements, I noted that my account was put in deferment in XXXX XXXX. I neither authorized nor wanted this deferment. My loans were close to being paid off when I last checked my balances in XXXX XXXX, and I looked forward to being relieved of this debt before I graduate from XXXX XXXX with new loan balances to pay in XXXX XXXX. 

My account for these loans has been on auto-payment for a long time, before Discover purchased my loans from XXXX in XXXX. I had no reason to think that my payments were not being deducted as instructed. I received no notice that my account was put into deferment, nor was it requested. The only notice that I received from Discover in XXXX XXXX was an indication that my interest rate had increased, which I attributed to the increase in federal rates. My interest rate was at 3.5 % for two loans and 3.25 % for one other at the time the deferment was instituted. Now, my interest rates are 3.75 % for two, and 3.5 % for the other.

I called Discover for an explanation on XXXX/XXXX/XXXX. Discover 's representative told me that Discover had a company-wide issue with this and had been resolving the cases as they came up. He advised me that several accounts had a " box '' checked on their applications indicating that their account should automatically move to deferment status if Discover is made aware that the customer is in school. I never notified Discover that I was in school, because it was never my intention to defer these loans. Furthermore, I do not recall ever checking a box for this option. The Discover rep moved my account out of deferment and told me that my next auto-payment would be XXXX/XXXX/XXXX. However, this does not resolve the issue that, had Discover not put my account into an unauthorized deferment, my account would have been basically paid off by XXXX XXXX. Also, some of my payments would have been at a lower interest rate. Now, I will be paying for these loans up to my graduation, at a higher interest rate. I asked Discover for remuneration for the inconvenience and increased interest rate and was told that none was currently available for customers, like me, who were affected by Discover 's error.

I contact CFPB today, because Discover indicated that this was an issue that affected many with student loans owned by Discover. Though my loans balances are low, and the amount of additional interest that I will end up paying will be small, other customers have larger loans balances, which will result in a larger payout to Discover in the long run. It is patently unjust that Discover should profit from their mistake. Furthermore, since the error was on the part of Discover, Discover has the responsibility to rectify the error and actively contact any and all customers affected, rather than the other way around.

Company response to consumer: Closed with monetary relief