Consumer complaint received 2023-09-26
Product: Student loan — Private student loan
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: DISCOVER BANK (CA)

1. I have reached a debt settlement with XXXX XXXX XXXXXXXX XXXX., a law firm engaged in debt collection, XXXX XXXX XXXX XXXX, XXXX XXXX, XXXX, CA XXXX, who represent DISCOVER BANK. 

2. I paid a first payment of {$25000.00} on Thursday, XXXX XX/XX/XXXX over the telephone. XXXX XXXX, the debt collector, assured me that I would be released of the debt if I made payments of {$1000.00} each for XXXX, XXXX, XXXX and XXXX and a final payment of {$16000.00} in XXXX. I agreed to the payment despite deep financial distress and in a state of extremely high duress. 

3. Since around XXXX, I have been in extreme financial distress. COVID-19 hurt my entrepreneurial endeavors greatly and I suffered multiple business failures. For the last few years, I have no fixed abode of stay, and have lived with friends and family. As of now, I have no income and no assets. 

4. Despite my dire situation, I have negotiated in good faith and settled with XXXX XXXX XXXXXXXX XXXX, a law firm engaged in debt collection acting under the authority of DISCOVER BANK, who were claiming damages of {$64000.00}. 

5. I called and spoke to XXXX XXXX and XXXX XXXX, authorized representatives of XXXX XXXX XXXX, XXXX acting under the authority of DISCOVER BANK, and explained my situation. XXXX XXXX continued the negotiation and we agreed upon an amount and payment schedule to settle the alleged debt. He told me clearly and repeatedly that the alleged debt would be settled in full if I made all the payments as agreed upon below : Payment XXXX XX/XX/XXXX : $ XXXX Payment XXXX XX/XX/XXXX : $ XXXX Payment XXXX XX/XX/XXXX : $ XXXX Payment XXXX XX/XX/XXXX : $ XXXX Payment XXXX XX/XX/XXXX : $ XXXX Payment XXXX XX/XX/XXXX : $ XXXX Total Payment : $ XXXX XXXX. In accordance with the XXXX XXXX Settlement Agreement with XXXX XXXX, I dealt with him and XXXX XXXX XXXX, XXXX, acting under the authority of DISCOVER BANK, in good faith and clean conscience. XXXX XXXX told me the XXXX XXXX Settlement Agreement would be void and his lawyers would file for a default judgment unless I made the first payment by XXXX XXXX. I made the payment after repeatedly seeking reassurance on the telephone, which is on a recorded line, that I would be fully discharged of my alleged debt. 

7. XXXX XXXX assured me that payment as per the plan we agreed upon would lead to a satisfactory resolution of the alleged debt. After the XX/XX/XXXX payment, I would not have to make any further payment or face any further liability for the alleged debt and would be completely free of all liability. This conversation, and indeed all earlier and later conversations, are recorded. 

8. Attorneys at XXXX XXXX XXXX, XXXX. acting under the authority of DISCOVER BANK sent a very different agreement to the XXXX XXXX Settlement Agreement I reached with XXXX XXXX. The Stipulation for Entry of Judgment Pending Performance Pursuant to CCP section 664.6. ( the Stipulation ) breaches the terms of the XXXX XXXX XXXX Agreement with XXXX XXXX in two material ways : 8.1. In Paragraph 1, the Stipulation says that the Defendant must submit proof of payment for the first appearance filing fee to counsel for Plaintiff within five ( 5 ) days. This Stipulation is strictly contingent on Defendants payment of his/her first appearance fee and on the filing of this Stipulation with the Court. 

8.2. In Paragraph 8, the Stipulation says the Plaintiff shall then file a request for dismissal but deliberately and sneakily fails to state that this dismissal is with prejudice. This implies that DISCOVER BANK could come after me even after I fulfill the XXXX XXXX Settlement Agreement to settle the debt. In fact, XXXX XXXX, in no uncertain terms, shockingly confirmed in an email that, even upon full payment in accordance with the terms of the XXXX XXXX XXXX XXXX, the matter would not be dismissed with prejudice. 

9. I sought advice about the Stipulation from an experienced attorney on a pro bono basis. He suggested changes to the Stipulation pertaining to the two points above. These changes would have aligned the Stipulation with the XXXX XXXX Settlement Agreement XXXX XXXX made with me after repeated assurances of the full discharge of debt that I relied and acted upon in good faith, to my detriment. In an email dated XXXX XXXX, XXXX XXXX, the Associate Attorney working for Attorney XXXX XXXX XXXX, summarily rejected both suggestions and threatened to file default if I did not send the signed Stipulation by XX/XX/XXXX. 

Under protest, I have sent the signed Stipulation with a note at the bottom stating the following : I am signing this Stipulation with the understanding that upon full payment of the settlement amount in accordance with the terms of this Stipulation, I shall be completely and unconditionally released from any and all obligations under the Student Loan Agreement that is the subject of the suit herein. 

10. This threat completely contradicts the XXXX XXXX XXXX XXXX XXXX XXXX and I reached! Never did XXXX XXXX mention that the XXXX XXXX XXXX XXXX was contingent on signing this Stipulation. He put a tremendous amount of pressure on me to make the payment by XX/XX/XXXX, which I did in good faith on the strength of his repeated assurances despite my extremely precarious financial situation. 

11. XXXX XXXX, XXXX XXXX XXXX and XXXX XXXX XXXX, XXXX. acting under the authority of DISCOVER BANK are changing the terms of the deal I struck with XXXX XXXX ex post facto. 

12. Specifically, XXXX XXXX, XXXX XXXX XXXX and XXXX XXXX XXXX, XXXX. acting under the authority of DISCOVER BANK are engaging in intimidation. They wanted me to sign a Stipulation at legal gunpoint by threatening to tear up the XXXX XXXX XXXX XXXX XXXX XXXX concluded with me. 

13. XXXX XXXX told me that he has done these negotiations for years with thousands of debtors. XXXX XXXX, XXXX XXXX and other debt collectors at XXXX XXXX XXXX, XXXX. acting under the authority of DISCOVER BANK are clearly skilled and seasoned operatives. They know how to exert pressure and exercise leverage. Yet they do not operate with clean hands. When extracting cash from debtors in duress, they do not mention that the agreement they offer on the telephone is contingent on signing another agreement at legal gunpoint! In the scheme, XXXX XXXX, XXXX XXXX and other debt collectors at XXXX XXXX XXXX, XXXX. act as good cops, baiting debtors to make payments according to aggressive deadlines. 

14. Advocates for XXXX XXXX XXXXXXXX XXXX specifically XXXX XXXX and his immediate boss XXXX XXXX XXXX in my case, are the bad cops. They are obdurate, intransigent, and threatening. They take the approach that debtors must sign the agreement they send ex post facto, even after a large initial payment, and even if that contradicts an earlier agreement. Advocates like XXXX XXXX and XXXX XXXX XXXX ensure that XXXX XXXX XXXX, XXXX, acting under the authority of DISCOVER BANK, never fully release the debtor of their obligations under the underlying student loan contract. This is unconscionable. 

15. The debt collection operations by XXXX XXXX XXXX, XXXX. acting under the authority of DISCOVER BANK are clearly a well-oiled machine. They involve chicanery, misrepresentation, and fraud. They operate behind smoke screens with no transparency. My case must be the mere tip of a gigantic iceberg. There must be thousands of such cases over the years where XXXX XXXX XXXX, XXXX, acting under the authority of DISCOVER BANK, have put debtors under duress, abused their trust, and caused them immeasurable damage. 

16. The actions of XXXX XXXX, XXXX XXXX, XXXX XXXX, XXXX XXXX XXXX and XXXX XXXX XXXX, XXXX. acting under the authority of DISCOVER BANK XXXX XXXX investigation both at the XXXX and XXXX levels. This would not be new when it comes to student debt collection. In XXXX, the Consumer Financial Protection Bureau ( CFPB ) sued XXXX for for systematically and illegally failing borrowers at every stage of repayment. 

17. I emailed XXXX XXXX of XXXX XXXX XXXX, XXXX. acting under the authority of DISCOVER BANK on XXXX XXXX with my reservations but did not hear back. 

18. On XXXX XXXX, I learnt that XXXX XXXX XXXX, XXXX. acting under the authority of DISCOVER BANK had filed for an entry of default and a court judgment despite my first payment of {$25000.00} on XXXX XXXX, good intentions to make payments as per our agreement and my regular communications. On XXXX XXXX, I sent XXXX XXXX and XXXX XXXX XXXX, XXXX, acting under the authority of DISCOVER BANK, the signed Stipulation and requested that we keep to the agreement XXXX XXXX made with me. I pleaded that they do not proceed with the entry for default and court judgment. 

XXXX. On XXXX XXXX, XXXX XXXX of XXXX XXXX XXXX, XXXX. acting under the authority of DISCOVER BANK finally spoke to me over the telephone and said that his firm would be proceeding with an entry of default and a court judgment but would not enforce the judgment if I made the payments that XXXX XXXX and I agreed upon. XXXX XXXX said that I should trust his word, but neither he nor anyone at XXXX XXXX XXXX, XXXX, acting under the authority of DISCOVER BANK would be sending an email or any other written document to this effect. This makes it clear that XXXX XXXX XXXX, XXXX. acting under the authority of DISCOVER BANK is not acting in good faith or coming to me with clean hands. They say one thing and then do another. Dishonesty, chicanery, misrepresentation, fraud, and intimidation are their modus operandi. To borrow the words of CFPB, all the actors at XXXX XXXX XXXX, XXXX. acting under the authority of DISCOVER BANK are systematically and illegally failing borrowers acting in good faith like me.