Consumer complaint received 2020-11-15
Company: DISCOVER BANK
State: IN
Product: Money transfer, virtual currency, or money service
Sub-product: Domestic (US) money transfer
Issue: Other transaction problem

Complaint:
Discover Bank is in violation of Regulation E. I, a consumer, have been forced into financial hardship for Discover Banks non-responsiveness to my communication ( s ), communications directly from the IRS, and communications from the Taxpayer Advocate Service  AND by Discover Banks lack of controls in place relevant to unauthorized transfers. To date, damages totaling {$6400.00} have not been returned to me or the IRS. 

In response to CFPB Complaint XXXX ( attached along with all supporting documentation ) Discover Bank stated, Our records show that we received communication from you on this topic well after the {$6100.00} federal tax refund and {$300.00} state tax were deposited... 

On the contrary, Regulation E 1005.6 ( a ) Timely Notice Given, states : ( 1 ) If the consumer notifies the financial institution within two business days after learning of the loss or theft of the access device, the consumer 's liability shall not exceed the lesser of {$50.00} or the amount of unauthorized transfers that occur before notice to the financial institution... 
( 3 ) Periodic statement ; timely notice not given. A consumer must report an unauthorized electronic fund transfer that appears on a periodic statement within 60 days of the financial institution 's transmittal of the statement to avoid liability for subsequent transfers. 

I notified Discover Bank the SAME DAY I learned of the unauthorized transactions. The funds were deposited into fraudulent Discover Bank account XXXX on XX/XX/2020. I informed of Discover Bank of this criminal activity via phone call on XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX and more dates that I didn't record. I've notified them via successful fax on XX/XX/XXXX and XX/XX/XXXX, and third parties, IRS and Taxpayer Advocate Service, notified Discover Bank as well ; correspondence attached for your reference. All efforts were well within the 2-day/60-day timeframes. 

Moreover, Regulation E 1005.6 ( a ) ( 5 ) Notice to Financial Institution states : ( i ) Notice to a financial institution is given when a consumer takes steps reasonably necessary to provide the institution with the pertinent information, whether or not a particular employee or agent of the institution actually receives the information. 
( ii ) The consumer may notify the institution in person, by telephone, or in writing. 
( iii ) Written notice is considered given at the time the consumer mails the notice or delivers it for transmission to the institution by any other usual means. Notice may be considered constructively given when the institution becomes aware of circumstances leading to the reasonable belief that an unauthorized transfer to or from the consumer 's account has been or may be made. 

Further, Discover Banks response also stated, you may want to contact the IRS and state tax authority to see if any remaining funds ( if applicable/available ) in the account can be recalled. The IRS and the Taxpayer Advocate Service have made numerous attempts to recall these funds PRIOR to Discover Banks response to my complaint. All third-party efforts have gone UNANSWERED by Discover Bank. Please see the attached letter from the Taxpayer Advocate Service that says depicts the efforts to reach Discover Bank and recall the funds. 

***IMPORTANT : The letter from Taxpayer Advocate Service is dated XX/XX/2020, but I did not receive until XX/XX/2020 as youll see in the email following the letter. The Taxpayer Advocate Service is months behind as a result from the COVID-19 pandemic, hence why I was unable to provide feedback on or before XX/XX/2020 as requested by CFPB*** The Federal IRS invoked a recall of the federal funds on XX/XX/2020. Indiana invoked a recall of the state return funds, of which the trace number was provided to Discover Bank via a successfully delivered fax on XX/XX/2020 ( attached for your reference ). 

EVEN MORE, youll see there were THREE unauthorized deposits into this fraudulent account ; one of which Discover Bank returned to the IRS. A CLEAR ADMISSION of wrongdoing! I am a taxpaying citizen and these funds belong to me ; NOT to Discover Bank. 

Lastly, When I spoke w/ Discover Banks security team, they stated that they were taking notes of our conversation ( s ), but I would not be updated because I am not an owner of fraudulent account XXXX. Per Regulation E, a financial institution is to keep its consumer current of investigative efforts. Though I am not the owner of account XXXX, I have a credit card and a loan through Discover. I AM A CONSUMER OF DISCOVER BANK. 

Regulation E 1005.11 ( a ) ( 1 ) states : Types of transfers or inquiries covered. The term error means : ( i ) An unauthorized electronic fund transfer ; ( ii ) An incorrect electronic fund transfer to or from the consumer 's account ;...

( vii ) The consumer 's request for documentation required by 1005.9 or 1005.10 ( a ) or for additional information or clarification concerning an electronic fund transfer, including a request the consumer makes to determine whether an error exists

Company response to consumer: Closed with explanation