Consumer complaint received 2020-01-29
Company: Bread Financial Holdings, Inc.
State: GA
Product: Credit card or prepaid card
Sub-product: Store credit card
Issue: Other features, terms, or problems
Sub-issue: Other problem

Complaint:
Hello. I'd like to report some major inconsistencies in the way Comenity Bank dba " XXXX XXXX XXXX '' opened and currently manages a line of credit I have with them. Their actions are negatively impacting my credit records and the merchant is unwilling to find a resolution. I would need your assistance to make them accountable for their mistakes, correct the information they reported to credit bureaus and find a permanent solution regarding my account. Please see below for details / timeline : - XX/XX/2019 : a company called XXXX XXXX that offers XXXX services for children proposed COMENITY CAPITAL / XXXX XXXX XXXX  as an option to finance their XXXX sessions. During a phone conversation, they mentioned I qualified for a {$5500.00} loan ( or credit ) at a 0.00 % APR for 24 months. I gave them a verbal confirmation of interest and told them I would further review it once I got home that day. 

FIRST RED FLAG : from that phone conversation alone, this account was somehow opened on my behalf. I never had an opportunity to review any term or condition associated with this loan/credit. Consequently, I NEVER SIGNED any documentation validating my commitment to this new account. Still, on XX/XX/XXXX I just received an email welcoming me to Comenity Capital ( document ). This email stated that I was supposed to receive some official approval documentation either via email from Comenity or at the XXXX XXXX XXXX. Such documents were never provided to me. In conclusion, right from the start, it can be argued that I never legally opened or committed to the terms of this account. 

- XX/XX/2019 : Comenity Capital reported this new {$5500.00} loan on my credit report as a " credit card '' and not an installment or personal loan with revolving credit. The fact that this was reported as a " maxed out '' credit card with a 100 % utilization ratio immediately caused me to lose more than 40 points on my credit score. 

Nonetheless, I ended up cancelling my daughter 's services at this XXXX XXXX XXXX about two weeks later after finding out numerous scam reports about this agency. XXXX XXXX agreed to refund most of the funds they had received from Comenity Capital on my behalf. This resulted in a credit of {$4700.00} being applied to my " fraudulent '' Comenity Capital account. 

Since this account was being reported as a credit card on my credit with a monthly minimum payment of only {$35.00}, I was expecting that this large {$4700.00} payment being applied to my balance would reduce my remaining balance and thus drastically reduce the amounts of my future payments - just the way it works with other credit cards. 
SECOND RED FLAG : although Comenity Capital received this large payment, they still requested minimum monthly payments of {$230.00} from me. Their justification for this was that this was considered an " installment loan '' and not a credit card. For more than two weeks, I tried to explain to them that this would have been fine if the account had been reported on my credit as an installment loan - which it was not. It was reported as a regular credit card with a minimum required payment of {$35.00}. The {$4700.00} credit they received on my behalf exceeded that amount by far. Nevertheless, they persistently refused to acknowledge this discrepancy between their mode of operation and the information they report to credit bureaus. Recently, they ended up reporting late payments on this account. I never had a single late payment on my credit profile and it has caused me to lose yet another 23 points. 

Please see all attached documentation supporting the above.

Company response to consumer: Closed with non-monetary relief