Consumer complaint received 2025-04-17 00:00:00
Product: Credit card — General-purpose credit card or charge card
Issue: Problem with a company's investigation into an existing problem — Problem with personal statement of dispute
Company: DISCOVER BANK
State: MD

Complaint narrative:
Discover Complaint-CFPB The credit card issuer has engaged in practices that are in violation of the FCRA ( Fair Credit Reporting Act ). 

The transactions in dispute are related to the transfer of an existing account to a new account number and the issuance of new cards. This transaction failed on XXXX occasions and deprived me of access to the credit line for approximately XXXX month. The credit card companys phone representative asserted that the Fraud Alert contact phone number I provided did not match their records which had no number on record, as the reason for the failed transaction. I asserted that this was impossible because one can not initiate a Fraud Alert with a CRA without providing a contact phone number. The CRAs are in possession of the phone number and I inquired why Discover did not have the same information. The representative speculated that if I recently initiated the Fraud Alert or changed the number recently then it was possible that Discover may not have record of the change. Discover only updates info from the CRAs once per billing cycle and that I may have to wait XXXX or XXXX billing cycles for the Discover data to synchronize to the data available to the CRAs. 

I presented to the credit card company in writing documents of XXXX facts : i ) that the initial Fraud Alert was placed XXXX  days before the denial, XXXX ) that the CRA which received the alert notification was sending the alert notifications to the XXXX other major CRAs, and iii ) finally that the CRAs were in possession of the contact number for the Fraud Alert. With these facts presented I requested a non-speculative explanation of why Discover Card Services data was not synchronized XXXX days after the initiation of the Fraud Alert and also to provide the source of the information that formed the basis for the denial. 

The credit card company did not respond to either of these requests for information. The company did however fabricate a dispute of 6 months of merchant transactions and reported such to the CRAs. The result of the credit card companys investigation into its own manufactured dispute was that the transaction details were correct and the account balance was considered valid. These results were reported to the XXXX major CRAs and additionally to the CRA XXXX. The Discover Card company respondents seem to be unaware of the bi-directional nature of the communications between Credit Reporting Agencies and XXXX granting companies. The XXXX granting companies report to the CRAs individual consumer transaction history, credit balances and payments, including adherence to and violations of the terms of agreement. The XXXX granting companies also receive communications from the CRAs containing credit histories from multiple sources and also includes consumer provided personal statements which may include information regarding Fraud Alert contact information. This information may be used by Credit granting company to make decisions on the offer of new credit services or the maintenance of existing credit lines. Identifying the CRAs that information was reported XXXX is not compliant with the requirement to identify the CRAs with whom information was received FROM to make business policy decisions that have an adverse impact on the consumer. 

In spite of the failure to comply with the disclosure requirements and hide the circumstances surrounding the denial of the requested transactions, I believe that I have discovered the actions of the company. I believe that Discover Card Services requested information from XXXX to verify the contact phone number for the Fraud Alert. XXXX is a secondary tier CRA which was not contacted by the consumer to initiate a Fraud Alert on the file that they manage. XXXX is not privy to the compact between the XXXX major CRAs who are required to notify the remaining XXXX CRAs when an initiated Fraud Alert is submitted to either CRA. XXXX had no Fraud Alert on the file that it managed and as a consequence had no Fraud Alert contact number on file. This would explain why the Discover Card Services phone representative would assert that there was no contact number in their data despite the fact that the major CRAs ( who actually had Fraud Alerts on the files they managed ) were in possession of the relevant information for XXXX days. 

The FCRA, 12 CFR Part 1022 ( Regulation V ), Appendix N, Paragraph I.D provides specific guidance for these circumstances. for the establishment of new credit plan and the issuance of additional credit cards. the user must have reasonable policies and procedures in place to form a belief that the user knows the identity of the applicant or contact the consumer at a telephone number specified by the consumer. The policies and procedures employed by Discover Card Services obviously do not satisfy this requirement. The request of verification of Fraud Alert from a CRA that is not party to the Fraud Alert is a design for failure. Compounding this procedural flaw, Discover Card Services failed to adhere to the regulatory guidance to contact the consumer at the consumer provided number for XXXX consecutive denials. On the fifth occasion Discover Card Services did follow this advice and the transaction was completed. 
Additionally, Discover Card Services hid the identity of the CRA which provided the information that formed the basis for the denial. This violates 12 CFR Part 1022 ( Regulation V ) Appendix N, Paragraph I. C. This violation deprived the consumer the opportunity to cure any defects, omissions or errors in the file of the CRA XXXX

Company response to consumer: Closed with explanation