Consumer complaint received 2023-11-27
Company: Affirm Holdings, Inc
State: IL
Product: Credit card
Sub-product: General-purpose credit card or charge card
Issue: Getting a credit card
Sub-issue: Application denied

Complaint:
I submitted an application that was denied. I caIled customer service, after the call getting " disconnected '' numerous times when told they were in violation of the law, I was able to get a customer service rep who informed that someone would contact me. requested a specific reason for the denial. The response was because my credit was frozen. That was not true. I explained that it was not frozen and asked for specific reasons. I was never given a specific reason. I was told about factors and algorithms, but never a specific reason. The company continues to close the case without a sufficient resolution. 

Below is all written correspondence with the company representatives with my name removed. 

Hello *Name Thank you for contacting Affirm! 



My name is XXXX, from the Customer Care Affirm Department and I will be more than glad to assist you with your concern. 



Thank you for your patience as we looked into this matter. I was able to see that youre trying to make a purchase but are being declined. After reviewing your account, we can confirm that your credit is frozen or locked. 



In order to successfully apply for a loan, youll have to temporarily lift the freeze or lock before we can process your application. Affirm works with the credit report agencies listed below. Make sure to lift your freeze or lock at all agencies where you have XXXX in place. You can do this online or via phone using the contact information below. 



XXXX : ( XXXX ) XXXX https : XXXX XXXX : ( XXXX ) XXXX XXXX XXXX XXXX When you lift your freeze or lock online or by phone, it usually takes effect quickly, sometimes within minutes. However, to be on the safe side, you should wait about an hour before you come back to Affirm and continue your application. When you lift your freeze or lock by mail, it can take up to a few days for the lift to take effect. 



Note that both agencies will provide the option to temporarily or permanently lift the freeze or lock. If you opt to lift it temporarily, you may need to go through this process again the next time you apply for an Affirm loan. 



We apologize for any inconvenience this has caused. For any further questions, please let us know by responding to this message or please give us a call at XXXX. Our customer care agents are available 7 days a week from XXXX - XXXX XXXX. Or any further questions, please contact XXXX through the Affirm help center at affirm.com/help. 



Kind regards, XXXX XXXX XXXX. 

Download Affirm app YOU ( VIA THE HELP CENTER ) XXXX, XXXXXXXX XXXX Hello XXXX XXXX I spoke with representatives at XXXX and XXXX and both report that there is no security freeze on my file, temporary or permanent. So that was not the specific reason for the declination. Discrimination happened, and the Equal Credit Opportunity Act make discrimination in a credit transaction unlawful.

ECOA makes it unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction, on the basis of race, color, religion, national origin, sex or marital status, age ( provided the applicant has the capacity to contract ), because all or part of the applicants income derives from any public assistance program, or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. I exercised my rights when I spoke with the Affirm representative last night. Take a listen to the multiple recorded phone calls. Once I started to exercise my rights in good faith, the phone calls were disconnected numerous times in an attempt to deny my rights as a consumer.

This Act ( Title VII of the Consumer Credit Protection Act ) prohibits discrimination on the basis of race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good faith exercise of any rights under the Consumer Credit Protection Act. The Act also requires creditors to provide applicants, upon request, with the reasons underlying decisions to deny credit.

In addition, ECOA provides that a creditor must provide a statement of specific reasons in writing to applicants against whom adverse action is taken. No specific reason was given, only a list of factors, which is different from a principal reason. Adverse action [ s ] include denying an application for credit, terminating an existing credit account, making unfavorable changes to the terms of an existing account, and refusing to increase a credit limit.

Pursuant to Regulation B, a statement of reasons for adverse action taken must be specific and indicate the principal reason ( s ) for the adverse action.> Regulation B explains that [ s ] tatements that the adverse action was based on the creditors internal standards or policies or that the applicant, joint applicant, or similar party failed to achieve a qualifying score on the creditors credit scoring system are insufficient. The Official Interpretations to Regulation B explain that [ t ] he specific reasons disclosed... must relate to and accurately describe the factors actually considered or scored by a creditor. Moreover, [ i ] f the reasons listed on the forms are not the factors actually used, a creditor will not satisfy the notice requirement by simply checking the closest identifiable factor listed. With respect to adverse actions based on a credit scoring system specifically, the Official Interpretations explain that the reasons disclosed must relate only to those factors actually scored in the system. Moreover, no factor that was a principal reason for adverse action may be excluded from disclosure. The creditor must disclose the actual reasons for denial ( for example, age of automobile ) even if the relationship of that factor to predicting creditworthiness may not be clear to the applicant.

I study consumer law and I am aware how borrowing, lending, banking, performance, securitization, and contracts work. Once I gave my Social Security Number and gave value to the credit application security, I should have been granted credit in the amount requested as a U.S. Citizen backed by the full faith and credit of the united states. This was more than sufficient to cover amount of the consumer credit transaction, which was the purchase price of the transaction {$660.00} on the XXXX website.

Grant the credit in an amount at or above the amount requested or retract my application security instrument and return the tender of the funds you received, to me. 
Thank you for your time and attention. 

By : *Name YOU ( VIA THE HELP CENTER ) XXXX, XXXX AM How is this case " Closed ''? I have not received a response since informing XXXX that there are no security freezes at the listed credit reporting companies. 
XXXX AT AFFIRMXXXX, XXXX AM Hi *Name, My name is XXXX and I'm a supervisor on the Customer Care team with Affirm XXXX I understand you are seeking clarification regarding your recent loan declination. I'm happy to provide additional insight. 



When reviewing your application Affirm considers several factors on your credit report including things like recently opened and closed tradelines, your repayment history, your credit limit and usage rate as well as your inquiry history. I see your recent declinations between XX/XX/XXXX and XX/XX/XXXX were declined because your reported XXXX score is below our minimum requirement. The last time you were declined a loan with Affirm due to a security freeze was on XX/XX/XXXX. As a reminder, these denials do not mean you will never be approved for a loan with Affirm in the future. I can see from your account you have been approved for loans with Affirm in the past and are still able to apply for loans with us in the future. 



Additionally, please understand that Affirm does not discriminate against any prohibited factors, such as race, color, religion, marital status, national origin, age, gender or sex play a part in Affirm 's automated algorithm that determines the creditworthiness of our applicants.

If you have any additional questions or concerns, please contact us through the Affirm Help Center at XXXX XXXX XXXX or call us at XXXX between the hours of XXXX am and XXXX pm XXXX  XXXX days a week. 



Thanks, XXXX XXXX. 

Download Affirm app YOU ( VIA THE HELP CENTER ) XXXX, XXXX PM As I stated prior, I study consumer law and I am aware how borrowing, lending, banking, performance, securitization, and contracts work. Once I gave my Social Security Number and gave value to the credit application security, I should have been granted credit in the amount requested as a XXXX Citizen backed by the full faith and credit of the United States. This was more than sufficient to cover amount of the consumer credit transaction, which was the purchase price of the transaction {$660.00} on the XXXX website. 
My multiple applications were turned into securities once I performed by offering my Social Security XXXXmber and a digital signature. Therefore either retract the multiple applications as instruments which were securitized and turned into legal tender at the time of the application and received by Affirm ; then tender payment to me for all interest, credits, and deposits received. Or grant the credit on an Affirm card in the amount of the transaction for each application instrument and return the tender of the funds you received, to the Principal from whom banks actually derive loan funds from. 

Thank you for your time and attention. 
By : *Name YOU ( VIA THE HELP CENTER ) XXXX, XXXXXXXX XXXX Hello XXXX XXXX, I read your reply. 

In it you state, " I see your recent declinations between XX/XX/XXXX and XX/XX/XXXX were declined because your reported XXXX score is below our minimum requirement. '' That answer in insufficient and not a lawful reason. Once again Affirm is discriminating. 

As I listed in previous communication, Regulation B explains that [ s ] tatements that the adverse action was based on the creditors internal standards or policies or that the applicant, joint applicant, or similar party failed to achieve a qualifying score on the creditors credit scoring system are insufficient.

So that answer about a score is insufficient.

Also, you stated, " Additionally, please understand that Affirm does not discriminate against any prohibited factors, such as race, color, religion, marital status, national origin, age, gender or sex play a part in Affirm 's automated algorithm that determines the creditworthiness of our applicants. '' An automated algorithm is not sufficient as well.

Also in the law, " Creditors who use complex algorithms, including artificial intelligence or machine learning, in any aspect of their credit decisions must still provide a notice that discloses the specific principal reasons for taking an adverse action. Whether a creditor is using a sophisticated machine learning algorithm or more conventional methods to evaluate an application, the legal requirement is the same : Creditors must be able to provide applicants against whom adverse action is taken with an accurate statement of reasons.15 The statement of reasons must be specific and indicate the principal reason ( s ) for the adverse action.16 A creditor can not justify noncompliance with ECOA and Regulation Bs requirements based on the mere fact that the technology it employs to evaluate applications is too complicated or opaque to understand. A creditors lack of understanding of its own methods is therefore not a cognizable defense against liability for violating ECOA and Regulation Bs requirements.

So yet and still, no specific and accurate reason given has been sufficient enough to justify the adverse action as anything but discrimination. Which is unlawful and a violation of the ECOA.

Yes. ECOA and Regulation B require creditors to provide statements of specific reasons to applicants against whom adverse action is taken. Some creditors may make credit decisions based on certain complex algorithms, sometimes referred to as uninterpretable or black-box models, that make it difficultif not impossibleto accurately identify the specific reasons for denying credit or taking other adverse actions.1 The adverse action notice requirements of ECOA and Regulation B, however, apply equally to all credit decisions, regardless of the technology used to make them. Thus, ECOA and Regulation B do not permit creditors to use complex algorithms when doing so means they can not provide the specific and accurate reasons for adverse actions.

ECOA makes it unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction, on the basis of race, color, religion, national origin, sex or marital status, age ( provided the applicant has the capacity to contract ), because all or part of the applicants income derives from any public assistance program, or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act.2 In addition, ECOA provides that a creditor must provide a statement of specific reasons in writing to applicants against whom adverse action is taken.3 Adverse action [ s ] include denying an application for credit, terminating an existing credit account, making unfavorable changes to the terms of an existing account, and refusing to increase a credit limit.4 Pursuant to Regulation B, a statement of reasons for adverse action taken must be specific and indicate the principal reason ( s ) for the adverse action.>5 Regulation B explains that [ s ] tatements that the adverse action was based on the creditors internal standards or policies or that the applicant, joint applicant, or similar party failed to achieve a qualifying score on the creditors credit scoring system are insufficient.6 The Official Interpretations to Regulation B explain that [ t ] he specific reasons disclosed... must relate to and accurately describe the factors actually considered or scored by a creditor.7 Moreover, while Appendix C of Regulation B includes sample forms intended for use in notifying an applicant that adverse action has been taken, [ i ] f the reasons listed on the forms are not the factors actually used, a creditor will not satisfy the notice requirement by simply checking the closest identifiable factor listed.8 With respect to adverse actions based on a credit scoring system specifically, the Official Interpretations explain that the reasons disclosed must relate only to those factors actually scored in the system. Moreover, no factor that was a principal reason for adverse action may be excluded from disclosure. The creditor must disclose the actual reasons for denial ( for example, age of automobile ) even if the relationship of that factor to predicting creditworthiness may not be clear to the applicant.9 ECOAs notice requirements were designed to fulfill the twin goals of consumer protection and education.10 In terms of consumer protection, the notice requirement is intended to prevent discrimination ex ante because if creditors know they must explain their decisions... they [ will ] effectively be discouraged from discriminatory practices.11 The notice requirement fulfills a broader need as well by educating consumers about the reasons for the creditors action.12 As a result of being informed of the specific reasons for the adverse action, consumers can take steps to try to improve their credit status or, in cases where the creditor may have acted on misinformation or inadequate information [, ]... to rectify the mistake.13 In addition, Congress also believed ECOAs notice requirement would have a beneficial competitive effect on the credit marketplace.14 Creditors who use complex algorithms, including artificial intelligence or machine learning, in any aspect of their credit decisions must still provide a notice that discloses the specific principal reasons for taking an adverse action. Whether a creditor is using a sophisticated machine learning algorithm or more conventional methods to evaluate an application, the legal requirement is the same : Creditors must be able to provide applicants against whom adverse action is taken with an accurate statement of reasons.15 The statement of reasons must be specific and indicate the principal reason ( s ) for the adverse action.16 A creditor can not justify noncompliance with ECOA and Regulation Bs requirements based on the mere fact that the technology it employs to evaluate applications is too complicated or opaque to understand. A creditors lack of understanding of its own methods is therefore not a cognizable defense against liability for violating ECOA and Regulation Bs requirements.

So stop discriminating against the Principal and grant the amount of credit on each application instrument that was securitized and turned into tender for payment. Once you were given a Social Security Number and a digital signature performance and tender were completed.

Or you can retract each one of those application instruments and tender payment to the Principal for all interest, credits, deposits, payment, or legal tender Affirmed received and tender all interest, credits, deposits, payment, or legal tender and mail to the Principal.

As I stated prior, I study consumer law and I am aware how borrowing, lending, banking, performance, securitization, and contracts work. I know that credit is not created until performance a of a security instrument such as an application. Banks can't lend from there own deposits so immediately upon submission of the application, a credit and deposit ledger entry is created.

Under the Consumer Protection Act I am exercising my rights in good faith as a Consumer and U.S. Citizen backed by the full faith and credit of the United States. You would not deny an application security instrument submitted by the United States, don't deny my multiple applications, that are backed by the United States.

Stop discriminating and add an Affirm card to the account in the amount of all the values of each application instruments performance. 

By : *Name YOU ( VIA THE HELP CENTER ) XXXX, XXXX AM Once again I see that Case ID Number : XXXX was closed without a resolution. A resolution can not happen until an agreement or understanding is reached. I have yet to receive a sufficient answer to my complaint. I also demonstrated the insufficiencies or inaccuracies of some of the answers communicated from the customer service representative and supervisor. 

Please inform me of what Affirm or it's agents, or representatives plan on doing to resolve my complaint. At that point I will let it be known if I find the proposed resolution sufficient and agreeable. Otherwise case ID number : XXXX should remain open and not closed arbitrarily by Affirm or it's agents or representatives. 
YOU ( VIA THE HELP CENTER ) XXXX, XXXXXXXX XXXX Its XX/XX/XXXX and I see the cased is showing closed, but without a sufficient lawful answer or or explanation of what the resolution is. 

Once again I see that Case ID Number : XXXX was closed without a resolution. A resolution can not happen until an agreement or understanding is reached. I have yet to receive a sufficient answer to my complaint. I also demonstrated the insufficiencies or inaccuracies of some of the answers communicated from the customer service representative and supervisor. 

Please inform me of what Affirm or it's agents, or representatives plan on doing to resolve my complaint. At that point I will let it be known if I find the proposed resolution sufficient and agreeable. Otherwise case ID number : XXXX should remain open and not closed arbitrarily by Affirm or it's agents or representatives. Please have a Supervisor, underwriter, legal department, trustee, or manager contact me to provide a resolution.

Company response to consumer: Closed with explanation