Consumer complaint received 2015-05-28
Company: DISCOVER BANK
State: MD
Product: Bank account or service
Sub-product: (CD) Certificate of deposit
Issue: Deposits and withdrawals

Complaint:
It has taken almost 3 months for my IRA CD account at Discover Bank to be transferred to the Government Thrift Saving Plan. During this period I was assesed an Early Withdrawal penalty by the Bank. I disagree that what I did was early and that I made a withdrawal, so I believe no penalty should have been assesed. 1. Early - Section XXXX of Discover 's XXXX Account Agreement defines a list of terms. Early is not among the terms defined, so I had to settle for the definition of " early '' in XXXX. The dictionary defines early as " of, relating to, or occurring near the beginning of a period of time ... '' According to Discover 's web site, my CDs were opened between XXXX XXXX and XXXX XXXX ( 3 to 5 years ago ), rolled over more than once, and have each retained the same CD identification number assigned at the original purchase. In such a case, one would think the period from purchase until the latest rollover would be considered " early ''. After that rollover, we would be in the present eagerly anticipating the next ( future ) rollover. To characterize the current or next action upon something established years ago as early indicates confusion with the concept of past, present, and future and seems a misuse of the English language. 2. Withdrawal -. a. Below is a quote from Discover 's web site sales pitch for their IRA. Please note that when the funds are coming in it is labeled a transfer ( no mention of withdrawal ) " With a transfer your money is moved directly from one IRA to another. The funds are exchanged between the financial institutions without the consumer ever handling them. ". b. Later on, when I questioned the " early withdrawal penalty, '' I was informed by an IRA specialist, " Any funds removed from an account are considered a withdrawal, in this case it was a withdrawal done via Transfer. Thus, per the Deposit Account Agreement, the Early Withdrawal Penalty does apply, and can not be waived. '' Other than the message above, I can not find any other reference to " withdrawal done via Transfer '' in Discover 's literature or web site. In XXXX, above, Discover is quoted as stating that a transfer occurs between institutions, yet when I request a Transfer ( between institutions ) of the entire account, I am penalized for a withdrawal.. How can this be? c. Related to early withdrawal is the statement in Section XXXX ( Amendments, Account Changes and Notices, of Discover 's Deposit Account Agreement, " If you are unwilling to agree to such amendments, you have the right to close your Account prior to the changes taking effect, subject to any Early Withdrawal Penalties. '' As I was/am willing to agree to the amendments and requested the IRA transfer subsequent to the Discover changes, I should not be subject to any early withdrawal penalties and my money restored. 3. Penalty - As it has taken Discover from XXXX until the XXXX to transfer my IRA account, I believe Discover has demonstrated outstanding proficiency in the subject of " lateness/late ''. Unfortunately, I do not believe it has demonstrated any aptitude in " early '' that would qualify it to assign penalties.

Company response to consumer: Closed with explanation