Consumer complaint received 2025-07-01 00:00:00
Product: Credit reporting or other personal consumer reports — Credit reporting
Issue: Problem with a company's investigation into an existing problem — Their investigation did not fix an error on your report
Company: DISCOVER BANK
State: TX

Complaint narrative:
I am filing this complaint against Discover Bank ( now part of XXXX XXXX XXXX XXXX ) for their continued inaccurate reporting of my account ( ending in XXXX ) to the credit reporting agencies ( CRAs ) despite issuing a Form 1099-C for the XXXX tax year, which canceled the debt. This inaccurate reporting has caused significant harm to my credit profile, financial well-being, and emotional health. Additionally, Discovers own privacy policies and federal obligations under the Fair Credit Reporting Act ( FCRA ) indicate they must report accurate information, which they have failed to do.

Unauthorized Communication Through Credit Reporting : The continued reporting of these accounts to credit bureaus constitutes a form of communication under 15 U.S. Code 1692c ( Communication in connection with debt collection ). This communication is unauthorized as I have not consented to continued contact regarding these alleged debts. This may constitute a violation under the Fair Debt Collection Practices Act ( FDCPA ) if done without proper legal justification.

Background Information : Account Details : The account ending in XXXX was opened on XX/XX/XXXX, via an online application submitted on XX/XX/XXXX. 
The account was charged off by Discover Bank on XX/XX/XXXX, with a balance of {$2600.00}. 
Discover sent the account to multiple outside agencies for collection between XX/XX/XXXX, and XX/XX/XXXX. 
Issuance of Form 1099-C : On XX/XX/XXXX, Discover Bank issued a Form 1099-C for the XXXX tax year, canceling the debt.

According to IRS regulations, the issuance of a Form 1099-C signifies that the creditor has discharged the debt and relinquished the right to collect it.

Inaccurate Reporting to Credit Reporting Agencies ( CRAs ) : Despite issuing a Form 1099-C, Discover Bank continues to report the account as charged off with a balance of {$2600.00} and a past-due amount of {$2600.00}.

Discover claims in their response dated XX/XX/XXXX, that the issuance of a Form 1099-C is " separate from the credit reporting for the account. '' This is misleading and does not align with federal guidelines or their own privacy policies.

Dispute History : I have disputed the inaccuracies with the credit reporting agencies ( XXXX XXXX and XXXX ) multiple times. 
Each time, Discover Bank failed to correct the inaccuracies or provide sufficient evidence to support their reporting.

Discovers response to my disputes was to mark the account as " disputed '' but not to correct or delete the inaccurate balance or status.

Loan Denial : On XX/XX/XXXX, my loan application with XXXX XXXX XXXX was denied due to the inaccurate reporting of this account.

My credit score, as reported by XXXX, was XXXX, and the denial letter cited serious delinquencies, high balances, and past-due amounts on my credit report as reasons for the denial.

Discover Banks Response : In a letter dated XX/XX/XXXX, Discover Bank reiterated their position that the reporting is accurate and refused to alter or delete the account history. Discover confirmed the issuance of the Form 1099-C but stated that the account will continue to be reported as " disputed '' unless I request otherwise. Violations Identified : Fair Credit Reporting Act ( FCRA ) Violations : 15 U.S.C. 1681e ( b ) : CRAs and furnishers must ensure maximum possible accuracy of reported information. Violation : Discover Bank continues to report the debt as charged off with a balance of {$2600.00}, despite issuing a Form 1099-C that canceled the debt. 15 U.S.C. 1681s-2 ( b ) : Furnishers must investigate disputes forwarded by CRAs, correct inaccuracies, and notify CRAs of any updates. Violation : Discover Bank failed to update the account to reflect the canceled status after issuing the Form 1099-C. 15 U.S.C. 1681i ( a ) : CRAs must conduct a reasonable reinvestigation of disputed information.

Violation : XXXX XXXX, and XXXX failed to properly investigate and correct the inaccuracies during the dispute process.

Federal Trade Commission ( FTC ) Unfair Practices : Unfair or Deceptive Practices : Reporting a canceled debt as collectible constitutes a false and misleading representation.

Violation : Discover Banks continued reporting of the canceled debt as charged off and collectible is an unfair practice under FTC guidelines.

Breach of Discovers Privacy Policies : Discovers privacy policies explicitly state that they collect, share, and report customer information in compliance with federal laws. Key points include : Card Privacy Statement : Discover is required to report accurate account information to CRAs. Reporting a canceled debt with a balance is inaccurate and violates their stated practices.

Online Privacy Notice : Discover claims to use customer information in compliance with legal obligations, including the FCRA. Their failure to update the account status after issuing a Form 1099-C breaches this obligation.

Identity Theft Protection Privacy Statement : Discover states that customers can dispute inaccuracies and expect them to be corrected. Their failure to resolve my disputes contradicts their stated commitment to accuracy.

Harm Caused : Loan Denial : The inaccurate reporting of the Discover Bank account directly led to the denial of my loan application with XXXX XXXX XXXX . This has caused financial harm, as I was unable to secure the funds needed for personal expenses.

Credit Score Damage : The inaccurate reporting has severely damaged my credit score, which stood at XXXX as reported by XXXX  on XX/XX/XXXX. 
Emotional Distress : The ongoing inaccuracies and failure to resolve the dispute have caused undue stress, frustration, and XXXX. 
Financial Harm : The inaccurate reporting has limited my access to credit, increased the cost of borrowing, and negatively impacted my financial stability.

Relief Requested : Immediate Correction of Reporting : Update the Discover Bank account to reflect a {$0.00} balance, no past-due amount, and a status of canceled or discharged in compliance with the issuance of the Form 1099-C.

Compensation for Damages : Credit Score Damage : Compensation of {$10000.00} to {$20000.00} for the harm caused to my creditworthiness, including loan denial and increased borrowing costs.

Emotional Distress : Compensation of {$5000.00} to {$10000.00} for the stress, frustration, and XXXX  caused by the inaccurate reporting and dispute process. 
Punitive Damages : Compensation of {$10000.00} to {$25000.00} for Discover Banks willful and egregious violations of federal laws, including the FCRA. Total Compensation Requested : {$25000.00} to {$50000.00}. Full Explanation of Investigation : Provide a detailed explanation of the investigation process, including supporting documentation used to verify the accuracy of the reported information. Compliance with Laws and Standards : Ensure compliance with all applicable laws, including the
FCRA, FTC guidelines, XXXX XXXX standards, and e-OSCAR procedures.

Supporting Documentation : Copy of Form 1099-C issued by Discover Bank ( XX/XX/XXXX ). 
Copy of the credit report showing the inaccurate reporting ( XX/XX/XXXX ). 
Copy of the loan denial letter from XXXX, XXXX ( XX/XX/XXXX ). 
Copy of Discover Banks response letter dated XX/XX/XXXX ). 
Relevant excerpts from XXXX privacy policies. 
Conclusion : Discover Banks failure to accurately report my account information and their refusal to correct the inaccuracies despite issuing a Form 1099-C have caused significant harm to my credit profile, financial stability, and emotional well-being. Their actions are in direct violation of the FCRA, FTC guidelines, and their own privacy policies. I request immediate corrective action and compensation for the damages caused by these violations.

Thank you for your attention to this matter.

Company response to consumer: Closed with explanation