Consumer complaint received 2025-01-29 00:00:00
Product: Debt collection — I do not know
Issue: Written notification about debt — Didn't receive enough information to verify debt
Company: DISCOVER BANK
State: IL

Complaint narrative:
Entities Being Reported for Violations : Primary Company : Discover Bank Discover Bank XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXXXXXX Debt Collection Law Firm : XXXX XXXX XXXX, XXXX. 
XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Complaint Categories : 1 ) Incorrect information on credit report ( FCRA violation ) 2 ) Improper debt collection practices ( FDCPA violation ) 3 ) Lack of proper debt validation 4 ) Unlawful lawsuit without arbitration ( Violation of Discovers Arbitration Agreement ) 5 ) Failure to issue IRS 1099-C for charged-off debt Details of the Complaint : I am filing this complaint against Discover Bank & XXXX XXXX XXXX XXXX XXXX XXXX for engaging in unlawful debt collection practices, improper credit reporting, and violating federal financial laws.

1 Illegal Charge-Off Reporting While No Longer Owning the Debt ( FCRA Violation 15 U.S.C. 1681s-2 ( b ) ) : Discover charged off this debt, sold it, but still reports a balance instead of {$0.00}, misleading credit bureaus. 
Under FCRA, a creditor can not report ownership of a debt that has been transferred to a third party.

2 Unlawful Lawsuit Without Arbitration ( Breach of Discovers Own Agreement ) : XXXX XXXX XXXX sued me on behalf of Discover Bank, even though Discovers own contract states that any dispute must go through arbitration first. 
Discover Bank violated their own arbitration clause, making the lawsuit illegally filed. 
A motion to vacate the judgment is being prepared, citing breach of contract.

3 Debt Collection Without Validation ( FDCPA Violation 15 U.S.C. 809 ( b ) ) : I requested full debt validation before any lawsuit was filed. 
XXXX XXXX XXXX provided no chain of ownership, no forward flow agreement, and no proof Discover even had legal rights to sue. 
The only response was billing statements, which do not constitute legal validation under FDCPA.

4 Securitization Fraud SEC Violation ( Based on SEC 10-K Filings ) Discover securitized this debt, meaning they sold it into a trust and no longer own it. 
Despite this, Discover falsely claims ownership and still reports the balance on my credit.

SEC 10-K evidence attached proving Discover Bank engaged in securitization and misrepresented its standing.

5 IRS Violation Failure to Issue 1099-C for Charged-Off Debt If a creditor charges off a debt, they are required by law to issue an IRS 1099-C for the canceled amount.

Discover Bank failed to do so, meaning they have not complied with IRS rules ( 26 U.S.C. 6050P ).

A Form 3949-A complaint has been filed with the IRS to report Discover Bank for non-compliance. 

Supporting Documents Attached : A ) Credit Report ( Showing Incorrect Charge-Off Reporting ) B ) Debt Validation Request & Response from Discover ( Lack of Proof ) C ) Discovers Arbitration Agreement ( Proving Lawsuit Shouldnt Have Been Filed ) D ) SEC 10-K Extract ( Proving Securitization ) E ) IRS Form 3949-A Reference Number : XXXXXXXX XXXX ) SEC 10-K Filing Compliant Reference Number XXXX XXXX

Company response to consumer: Closed with explanation