Consumer complaint received 2017-08-10
Product: Credit card or prepaid card — General-purpose credit card or charge card
Issue: Fees or interest — Charged too much interest
Company: DISCOVER BANK (PA)

Please reference the following conversation where the Discover chat representatives seem to be a little under-coached on Credit Card Law. It would appear they do n't take any of that seriously, and I 'm astonished that organizations like them are allowed that much leeway. My attorney read the transcript and had a different opinion aside from what XXXX claims is the law. XXXX especially should not be in the firm position he/she is in. That person does n't know how to speak to someone who is trying to explain to a company the law as it stands in the country. Youre now chatting with XXXX. XXXX at XXXX, XXXX XXXX : Hello, how can I help you today? XXXX XXXX at XXXX, XXXX XXXX : Good evening. XXXX XXXX at XXXX, XXXX XXXX : This is XXXX. Please explain how interest is applied from excess payments over the minimum being that the interest rate is equivalent on all 3 balances. XXXX XXXX at XXXX, XXXX XXXX : Are you dividing the excess amount by 2 for the other 2 balances to shed identical portion payments? XXXX at XXXX, XXXX XXXX : Good evening XXXX! Since all of your balances are at the same rate, all of your payment is allocated from the lowest balance to the highest. So the lowest balance will be paid off first. Does this information help answer your question? XXXX XXXX at XXXX, XXXX XXXX : I understand, but of course that puts paying it down at a disadvantage. XXXX XXXX at XXXX, XXXX XXXX : So, if I understand what you 're saying and I think I do, let 's say I pay the entire balance of the Balance for purchases made on and after XX/XX/XXXX with the next payment. The excess would then go to a lower balance? XXXX XXXX at XXXX, XXXX XXXX : so cash advances? XXXX XXXX at XXXX, XXXX XXXX : being that the regular purchase balance is close to {$9000.00}, that puts the cash advance balance at a lower threshhold XXXX XXXX at XXXX, XXXX XXXX : But contrary to the above, in a normal scenario, the cash advance interest rate is much higher than the purchases interest rate XXXX XXXX at XXXX, XXXX XXXX : Are you following me? XXXX at XXXX, XXXX XXXX : All of your balances are currently at a fixed 16.99 % so interest is accruing at the same rate across all three of these balance. You are correct about the cash advance being the next lowest balance so after your first purchase balance is paid off, the payments will start being allocated to the cash advance balance. We do apply payments and credits to your balance at our own discretion in correspondence with the Credit Card Act XX/XX/XXXXbut I am happy to forward your feedback to our headquarters. Did you have any other questions about your account today? XXXX XXXX at XXXX, XXXX XXXX : You can at your own discretion IF AND ONLY IF the interest rates are the same. Secondly, if I may, you are still required to report to the cardholder where you are applying them, otherwise, it could be considered a conflict of interest. XXXX XXXX at XXXX, XXXX XXXX : Meaning, you 're secretly creating a conflict without representing the truth. XXXX XXXX at XXXX, XXXX XXXX : Does this make sense to you? XXXX XXXX at XXXX, XXXX XXXX : Just like in a court of law, nobody should be left with any surprises after they happen. XXXX XXXX at XXXX, XXXX XXXX : Full disclosure is the name of the game. XXXX at XXXX, XXXX XXXX : We do provide the terms of payment allocation with the terms of your account when it is opened. As this debt belongs to Discover, we may apply the payments and credits at our own discretion, even if they are at different rates. Would you like me to send you the terms of your account? XXXX XXXX at XXXX, XXXX XXXX : If what you 're telling me is how you practice your policies, then you 're breaking the law. XXXX XXXX at XXXX, XXXX XXXX : In accordance with that Credit Card Act of XXXX, with respect to the lower interest rate balance, you are expected to put the minimum towards that, and any excess is REQUIRED to go to the next highest interest rate balance, and so on and so forth. you go from lowest to highest when they are all different interest rates. Not sure who told you that you are n't held to the morals of the law. XXXX at XXXX, XXXX XXXX : I am sorry to hear that you feel this way and I want to ensure that your concern is heard. Would you mind if I connected you with my supervisor to ensure this matter is handled appropriately? XXXX XXXX at XXXX, XXXX XXXX : You had better because I would like an explanation as to why your company thinks it is above the law haha. Info at XXXX, XXXX XXXX : Please wait while your chat is transferred to XXXX. Info at XXXX, XXXX XXXX : Youre now chatting with XXXX. XXXX XXXX at XXXX, XXXX XXXX : Here 's an FYI XXXX XXXX at XXXX, XXXX XXXX : The Credit Card Accountability, Responsibility and Disclosure Act of XXXX made significant changes to how issuers can apply credit card payments to the consumer 's advantage. Any excess amount beyond the minimum payment must be applied to the balance with the highest interest rate. XXXX at XXXX, XXXX XXXX : XXXX Hello XXXX, I am a supervisor here in our XXXX XXXX office, I do see that you have been chatting with XXXX, allow me a moment to review this chat and I will be right with you, thanks. XXXX XXXX at XXXX, XXXX XXXX : If you are n't following the above measure, you are in direct violation of that statute. I will be forced to report your company to various legislators including the FTC, the CFPB and related organizations if this is what you state your company is doing. XXXX at XXXX, XXXX XXXX : XXXX You are welcome to take any actions outside of Discover as you see fit, I know it can be important to have more actions available. I do apologize for the confusion that you XXXX have at this time but all of your interest rates are the same. XXXX XXXX at XXXX, XXXX XXXX : Yes, when the interest rates are the same, I understand that, but your previous representative stated at any time you have the rights of discretionary action with respect to payments. This would absolutely include you would apply payments as you see fit at whatever balance you want them to go to. If you 're violating this : XXXX XXXX at XXXX, XXXX XXXX : The Credit Card Accountability, Responsibility and Disclosure Act of XXXX made significant changes to how issuers can apply credit card payments to the consumer 's advantage. Any excess amount beyond the minimum payment must be applied to the balance with the highest interest rate. XXXX XXXX at XXXX, XXXX XXXX : Then your company will be in serious trouble. XXXX XXXX at XXXX, XXXX XXXX : Your company can not do whatever it wants. XXXX XXXX at XXXX, XXXX XXXX : You are required to follow all legal processes. XXXX XXXX at XXXX, XXXX XXXX : If you are n't, well then your company will be prosecuted. XXXX at XXXX, XXXX XXXX : XXXX Thank you for that information, while we do act with respect for and follow the laws on lending, the act does allow some fluctuation, and while we do follow the law, we are also owed the debt. I am sorry if you have taken anything out of context from the previous chat, you are welcome to take any actions outside of Discover as you would like. While you have me on chat, did you have any other questions that I can assist you with about your account specifically? XXXX XXXX at XXXX, XXXX XXXX : I 'm going to forward this entire conversation over to my attorney 's office to get his opinion. His team of litigators work hard to make sure this type of fraud is stopped. XXXX at XXXX, XXXX XXXX : XXXX I hope you enjoy the rest of your day the best you can. XXXX XXXX at XXXX, XXXX XXXX : Your tone is not appreciated, and I do n't believe you are taking anything I 'm saying seriously.