Consumer complaint received 2022-05-25
Company: SYNCHRONY FINANCIAL
State: DE
Product: Credit card or prepaid card
Sub-product: Store credit card
Issue: Fees or interest
Sub-issue: Problem with fees

Complaint:
I have a XXXX XXXX Synchrony credit card with a promotion that I would pay a fixed amount {$160.00} per month. ( Similar to a term loan ) Last Fall ( XXXX ) My payment was late and I was assessed a late fee of {$40.00}. I paid {$200.00} which was comprised of the {$160.00} plus a {$40.00} late fee. Synchrony bank applied the entire {$200.00} towards the principal balance and continued to charge me interest on the {$40.00} late fee. I asked them to correct the application of my payment and was denied. I ended up paying interest for 5 months on a late fee that Synchrony did not properly apply my original payment to. 
After hours of arguing, Customer service in an effort to resolve this issue, reversed the {$40.00} late fee in XX/XX/XXXX, but never reversed the interest. I was told by Sychrony that I was not allowed to deduct the {$40.00} credit from my XX/XX/XXXX payment due. 

On XX/XX/XXXX, I faulted on my monthly obligation of {$160.00} due to Covid. As stated, Synchrony would allow me to apply the {$40.00} credit to my {$160.00} XXXX payment. In fact, they increased my payment on XX/XX/XXXX to {$200.00} to pay for a late fee assessed on XX/XX/XXXX that Customer service agreed to also reverse. 

Here is the problem : First They would not allow me to reduce my XXXX payment for the {$40.00} cr adjustment given in XXXX. 
Second On XX/XX/XXXX, Sychrony increased my XXXX promotional payment from {$160.00} to {$200.00} due to the late fee, but would not reduce the XXXX payment back to {$160.00} when they reversed late fee. 

That is two {$40.00} late fees totaling {$80.00} that they made me pay even though they reverse it. Rather than reducing the minimum payment from the {$200.00} back to the original obligation of {$160.00}, They apply it to my principal balance. My contract states that I am to pay {$160.00}. plus late fees. If the late fees are reversed, I should not have to pay them. 

They are using the {$80.00} to shorten the length of the loan by reducing the principal balance with money that I consider as being overpaid. They are using my {$80.00} interest free! My interest was calculated at the beginning of the loan therefore my principal balance includes imputed interest. This imputed interested is not being adjusted when they apply my {$80.00} overpayment that I was forced to pay to that balance. When those late fees were removed, I should have either been refunded ( money back in my bank account ) or my next payment reduced. 

The SEC really needs to really take a look at Sychrony Bank is treating imputed interest in these cases. 
Interest on my {$80.00} for the next couple of years might not seem like much, but when you consider all the people they are doing this to month after month, the imputed interest they are not adjusting for or refunding to consumers is alot of money.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation