Consumer complaint received 2024-06-29
Product: Credit card — General-purpose credit card or charge card
Issue: Other features, terms, or problems — Problem with balance transfer
Company: DISCOVER BANK (HI)

This complaint involves Discover Card and its Balance Transfers. As of today, 2 of the 3 balance transfers I have with Discover remain at the promotional rates. I attempted to pay off 2 of the 3 outstanding balances, which had a total balance of {$7300.00}. I clarified with Discover, via their Chat feature online, that my payment would be applied to the 2 outstanding balances because they are the earliest expiring. There was nothing in the written policies indicating otherwise and any questions pertaining to these issues were directed to customer service agents at Discover. 

On XX/XX/XXXX payment of {$8000.00} was received by Discover but was not applied to the 2 expiring promotional balances ( one expired on XX/XX/XXXX and the second expires on XX/XX/XXXX ). As a result of the payment being incorrectly distributed to pay off my closest expiring balances ( as advised by a CSA from Discover, via chat ), which would have meant I only had one balance transfer remaining at a lower interest rate and which expires in XXXX, I am now subjected to a substantially higher interest rate, which is the total amount of the transfer balance, not just what remains, for the expired promo and if I don't pay off the promo with the highest interest rate, which is the promo expiring next year, none of my future payments will be applied to the expiring promo, only the minimum payment due. This prevents me from being a good money manager and also restricts me from taking advantage of these promotions, which I paid a fee for. This is bait and switch and is extremely misleading to consumers who look at ways to cut debt and save money. 

I contacted Discover again today, XX/XX/XXXX. XXXX, via their chat feature and was told that their policy was explained wrong to me the last time and that their policy actually states ( to them, not available to the consumer ) that the minimum payment balance ( when paid ) will be applied to the nearest expiring promo ( if any ). Then the remainder will be applied to the highest interest rate payment balance ( in my case 5.9 %, which is the promo expiring next year ). Thus, the {$8000.00} that I paid to pay off the balances of the promos expiring in XXXX and XX/XX/XXXX was not fully applied to those balances. 

I requested a copy of their written policies detailing this and advised them that the agreement for balance transfers did not indicate any of this, nor is this information available on their website. They advised me they did not have anything in writing but I could copy and paste the conversation in chat as a written record. I pointed out and shared with them the previous chat with the Discover agent who advised me the payment would apply to the closest expiring promos, and asked how this was different with me saving the chat this time. I was assured that it was. 

I asked to come to a settlement so I could immediately pay off whatever amount we agreed to ( less than what I currently have as a balance ) due to my not having funds available, and immediately close my account. I was advised that they don't settle balances but they could offer me a refund of 3 months of interest payments. They would also refund me the payment I sent in which was improperly applied to the wrong balances. I was also assured that the refund amount, although added back onto my balance, would not be charged any interest until it is completely paid off. 

I am frustrated that I was deceived by a major Credit Card company and their Supervisors apparently not given the authority ( or claimed they weren't allowed to ) to settle dollar amounts ( no amount was ever entertained ). I am also taken aback that I was told they do not have the ability to direct payments to specific balances ( such as the promos I had ). Again, this appears to be bait and switch and is highly unethical and deceptive. This smells of corporate theft from consumers on fixed incomes and needs to be addressed. 

A satisfying resolution for my specific case would be settling my outstanding debt at half of what I owe, with no negative blemishes added to my credit score, and my account being permanently closed. This was asked of the Supervisor ( other than the amount of settlement ) and I was told they do not do this. As of today, after this long chat with Discover, I still have a balance due and I feel that the issue is still not properly addressed. Also, the fact that I was advised by one of their representatives ( on chat and in writing ) and then other representatives apologizing for incorrect information but doing nothing about it, yet telling me that having a copy of this chat is sufficient proof of their policy ) minimizes the rights consumers are supposed to have. Why is the written conversation saved in chat with the first representative ( who apparently gave me wrong information ) not sufficient proof? 

All I wanted to do and tried to do was pay off my expiring balance transfer debt, leaving one other promo open with enough time according to the agreement to pay it off. I was restricted from doing that and now have to face the potential of being financially penalized for a policy that appears to be just verbal. This is shameful of Discover, a company I've been a customer of for over 30 years. I am hoping CFPB can assist me in resolving this issue by helping me to settle my debt, closing my account with Discover, and assuring my credit score ( which is in the XXXX range ) is not negatively affected. 

Thank you