Consumer complaint received 2019-10-16
Company: DISCOVER BANK
State: PA
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Closing your account
Sub-issue: Company closed your account

Complaint:
On XX/XX/XXXX, I paid down my Discover balance by {$7000.00} ( from around {$11000.00} ). The balance had been current with no history of delinquency per my recent recollection. The limit on the card was about {$12000.00}, so my payment freed up utility on my card and should have improved my overall credit. I had made multiple payments toward several current balances with other issuers in order to improve my credit and free up utility in my credit lines. 

Around XXXX of XXXX, Discover notified me that they were lowering my credit limit down to right around the remaining balance on my card ( about {$4000.00} ). I don't recall ever receiving an adverse action letter specifying the reason for the line decrease, and as a customer who had just paid down a significant portion of my current balance, I was surprised at the action taken.

In an effort to understand what was happening and why, I called Discover and had a phone conversation with someone from their portfolio customer service team. The specialist informed me that some negative information on my credit report was the reason for the line decrease. When I pressed for specifics, he noted a XXXX card with a delinquency, a XXXX XXXX checking account with a delinquency, a XXXX delinquency, and a XXXX XXXX delinquency. 

Much of what he said to me regarding my credit report and the reason for the line decrease came as a complete surprise to me. I was aware of a {$100.00} delinquent balance on a XXXX card that I no longer used. I had an annual autopayment for a subscription set up on the card, and because I no longer used the card I was unaware that I even carried a balance. That delinquent {$100.00} balance was resolved in the summer of XXXX immediately when I became aware. Aside from the XXXX card, I had no idea what he was referring to when he mentioned a XXXXXXXX XXXX account, a XXXX account, and a XXXX XXXX account. I was admittedly flustered by the information that the specialist provided since none of it made sense to me. My first thought was that I was being scammed by some type of fraudster, and since Discover 's  action of an {$8000.00} line decrease seemed severe, I proceeded to close / freeze the Discover card in fear that I would incur any further damage from a potential fraudster by leaving the card open. 

I immediately called XXXX to discuss my account standing, and after speaking with them, I confirmed that I never had any delinquency with them - my account had always been in good standing. I then ordered a record of my credit report in order to understand the comments the Discover specialist made about the XXXXXXXX XXXX  and XXXX delinquencies as I didn't recall having any relationship with either bank. Upon receiving my credit report within a week or so, I confirmed I have never had any relationship with XXXX. I also did see a brief delinquency on a XXXXXXXX XXXX checking account in XXXX while I was a student and mismanaged a checking account temporarily, however that information was not new to Discover since I became a Discover card customer well after XXXX. Therefore it seems to me that Discover took a negative action against me that negatively affected my credit by lowering my utility, even though I had just paid back a significant balance, and they poorly and inaccurately communicated the reason why. 

After discussing everything that had happened with my husband, I realized that it was not to my financial advantage to close the Discover card, as maintaining current accounts over time improves credit. I only took that action in fear that someone was committing fraud against me, since Discover noted so many delinquencies with so many financial institutions all at once. My credit was also negatively affected by a large decrease in my credit limit with Discover, since utility thresholds are a major contributor to credit score. As someone who maintained my Discover card in good standing and who had just paid down {$7000.00} of my balance, I was expecting to improve my credit and continue my positive relationship with Discover. Instead, a negative action was taken against me and the reasoning for the action was poorly and  inaccurately communicated. 

After considering everything that had happened, ultimately I just wanted to keep my credit in good standing and maintain my credit history and utility that I had worked hard to build. My husband and I called back Discover to discuss reopening the card and adjusting the limit back to the norm. They tried to let us know that they can not reopen cards. However, I am aware that cards can be reopened. Upon questioning Discover, they admitted that cards can be reopened but only when the closure was an error on their part. My husband and I tried to reason with them that the account closure was in large part due to their error, because although I verbally authorized the closure, I was doing so in fearful reaction to the inaccurate information they communicated about my credit report and overall financial standing. Again, my fear was that I had been targeted by some type of fraud and that inaccurate or fraudulent charges were affecting my credit, and with that thought in mind my first reaction was to just shut down / freeze everything with Discover. Again, looking back I wish I had the calm of mind to think through how to proceed rationally, but the inaccurate information that Discover provided caused a panic that I was in financial distress due to some type of scam or fraudster.

After one last call another time to Discover where my husband and I pleaded to reopen the card and reinstate the credit line, again their team insisted that they had done nothing wrong. At this point, I felt totally wronged by Discover. I made every effort to be a good customer. I upheld my end of the card agreement, and yet they chose to take negative actions against me in a way that does not seem right for consumer finance. If Discover took similar actions against other consumers, I'd think the CFPB would want to investigate what happened to ensure it does not happen again.

Company response to consumer: Closed with explanation