Consumer complaint received 2025-04-09 00:00:00
Product: Checking or savings account — Checking account
Issue: Closing an account — Company closed your account
Company: DISCOVER BANK
State: MA

Complaint narrative:
This complaint is a continuation of CFPB XXXX XXXX. XXXX and XXXX, related to Discover Banks handling of my XXXX XXXX account ending in XXXX. 

XXXX. Discover Admitted to Overdrafting My Account Due to a Merchant-Initiated Increase, Yet This Is Not Covered in Their Policy. Discover acknowledges in their XX/XX/XXXX response that my overdraft occurred because a merchant increased the charge after authorization, from {$31.00} to {$32.00}, pushing my account to negative {$0.00}. I did not opt into overdraft services, had no linked accounts, and had previously seen similar transactions declined. Discover argues the preauthorization matched my balance, so it was approved. 

However, Discovers XXXX Deposit Account Agreement makes no mention of how overdrafts caused by post-authorization merchant increases will be handled. Their policy implies customers are protected from overdrafting unless they explicitly opt in and link another account. 

By revealing a scenario where overdrafts are permitted despite opt-out, Discover has effectively confessed to applying an internal policy that is not disclosed in writing. This constitutes a lack of transparency and unfair application of rules. I was not warned that a merchant-modified charge could bypass the protection I was relying on. 

I ask the CFPB to consider whether this violates Regulation E ( 12 CFR 1005.17 ), which requires opt-in for overdraft coverage and emphasizes clear disclosures. If Discover allows overdrafts in certain merchant update cases, that exception must be stated in the consumer agreement, not discovered only through adverse action.

2. Discover Failed to Notify Me or Offer a Simple Way to Resolve the Issue Discover claims it sent XXXX letters ( dated XX/XX/XXXX and XX/XX/XXXX ) notifying me of the {$0.00} overdraft. However, this entire time coincided with the holiday season. I was away from home during this time, and they made no other attempt to contact me, no calls. Notably, the returned check image Discover later shared with me included a message : Please call us if there are any questions. Yet Discover never made any such call to me. Had they reached out or simply explained that the merchant-modified charge had overdrawn my account, I could have resolved the situation before closure. The absence of real-time contact over a {$0.00} balance, especially while holding {$13.00} in cashback rewards, feels punitive and out of proportion. 

XXXX. Discover Withheld My Cashback Bonus, And Their Justification Is Vague and Unfair. When they closed my account on XX/XX/XXXX, Discover forfeited {$13.00} in Cashback Bonus rewards I had earned. Their Deposit Account Agreement says rewards " may be forfeited if the account is closed '', not " will '', leaving room for discretion. 

They exercised that discretion to seize my rewards while declining to apply it toward the {$0.00} balance or return it to me afterward. 

I ask the CFPB to assess whether such a vague forfeiture policy meets consumer fairness standards under UDAAP provisions of the Dodd-Frank Act. The bonus was earned before the account issue, unrelated to the overdraft, and its confiscation, especially without notice, feels retaliatory. There is no clause stating that cashback must be forfeit if the customer makes a good-faith attempt to resolve a charge-off, as I did. 

4. I Sent a Check in Good Faith and It Should Now Be Accepted. I sent a check for {$0.00} via my XXXX  XXXX XXXX XXXX app. In the Notes field, I wrote Charged-off and included my full Discover account number, as instructed in Discovers letters. 

Discover later returned the check, claiming it lacked a memo. However, I have attached a screenshot from my XXXX  XXXX XXXX app clearly showing the notes that were included on my end. Now that Discover has a copy of this check and I have clarified my intent, and they have acknowledged receiving it. I believe the condition for processing it has been met regardless. 

This is a resolved situation, and the check should be honored immediately. Denying it again would be willful neglect of my good-faith effort. 

The CFPB has taken action against XXXX XXXX and XXXX XXXX  for overdraft practices that lacked clear consent or transparency. In XXXX, the CFPB fined XXXX XXXX  for enrolling customers into overdraft programs without opt-in. In XXXX, the CFPB found XXXX XXXX was freezing accounts over suspected fraud and applying surprise overdraft fees, resulting in significant consumer harm. 

My situation parallels these issues. Discover : Did not provide real-time notification. 

Allowed a surprise overdraft due to a merchant-initiated change. 

Froze and closed the account over a negligible amount. 

Withheld rewards far greater than the amount in dispute. 

Ignored good-faith resolution attempts, then tried to use policy language to justify the harm caused. 

Unfair and Disproportionate Treatment Discovers actions resulted in : Account closure Charge-off status Loss of {$13.00} in cashback Potential harm to my credit and banking record All for {$0.00}. 

If their goal was to recoup the balance or help me correct the issue, they could have applied the cashback, accepted the payment, or provided clearer outreach. Instead, they chose to escalate without proportionality or flexibility. 

Even if their policies technically permit these actions, they lack transparency, grace periods, and reasonableness. This raises UDAAP concerns under XXXX XXXX XXXX unfair acts causing consumer harm that is not reasonably avoidable.

Company response to consumer: Closed with explanation