Consumer complaint received 2024-04-16 00:00:00
Product: Credit card — General-purpose credit card or charge card
Issue: Other features, terms, or problems — Other problem
Company: DISCOVER BANK
State: HI

Complaint narrative:
I am writing this complaint letter against Discover. My husband and I have sent them a tender of payment and have not gotten a response. With the tender payment I sent a letter of instruction in this letter I sent UCC that show them why and how my tender of payment is valid.

UCC 3-104, 3-301, 3-603, 3-111, 3-604. You will find the letter attached. I know they got the letter because I sent it registered mail and got a receipt that they had received it.

To further support, my tender payment is the following : 12 U.S. Code 5481 - Definitions Sense Complaint ( 18 ) Payment instrument The term payment instrument means a check, draft, warrant, money order, travelers check, electronic instrument, or other instrument, payment of funds, or monetary value ( other than currency ).

( 29 ) Transmitting or exchanging funds The term transmitting or exchanging funds means receiving currency, monetary value, or payment instruments from a consumer for the purpose of exchanging or transmitting the same by any means, including transmission by wire, facsimile, electronic transfer, courier, the Internet, or through bill payment services or through other businesses that facilitate third-party transfers within the United States or to or from the United States .

As I continue to study and gain the knowledge of securities and securitization and the codes and laws that govern them it has led me to knowledge of the numerous inconsistencies in the contracts/application.

FAILURE TO DISCLOSE : Title 15 U.S. Code 1635 ( a ) Disclosure of obligors right to rescind.

Title 28 CFR 16.53 ( a ) ( b ) ( 1 ) ( 2 ) ( 3 ) - Use and collection of social security numbers.

Title 42 U.S. Code 408 ( 8 ) - Penalties ( related to Disclosure of the use of Social Security Numbers ).

Title 17 CFR 248.1 ( a ) ( 1 ) ( 2 ) ( 3 ) - Initial privacy notice to consumers required, 17 CFR 248.49 ( a ) ( 2 ), 17 CFR 248.6 Information to be included in privacy notices, 17 CFR 248.7 ( a ) ( 1 ) ( i ) ( ii ) ( iii ) - Form of opt out notice to consumers ; opt out methods.

Title 12 CFR 360.6 ( a ) ( 2 ) ( 3 ) ( 4 ) ( 5 ) ( 6 ) ( 8 ) ( 9 ) - Treatment of financial assets transferred in connection with a securitization or participation ( Transparency regarding the process of the consumer credit application & financial asset ( s ) Take notice pursuant to Title 15 U.S. Code 1635 ( a ) : Except as otherwise provided in this section, in the case of any consumer credit transaction ( including opening or increasing the credit limit for an open end credit plan ) in which a security interest, including any such interest arising by operation of law, is or will be retained or acquired in any property which is used as the principal dwelling of the person to whom credit is extended, the obligor shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required under this section together with a statement containing the material disclosures required under this subchapter, whichever is later, by notifying the creditor, in accordance with regulations of the Bureau, of his intention to do so. The creditor shall clearly and conspicuously disclose, in accordance with regulations of the Bureau, to any obligor in a transaction subject to this section the rights of the obligor under this section. The creditor shall also provide, in accordance with regulations of the Bureau, appropriate forms for the obligor to exercise his right to rescind any transaction subject to this section.

I was never given a notice informing me I had the right to rescind.

The use of my Social Security Number was abused in the process as well. Pursuant to 28 CFR 16.53, I was NEVER given disclosure that ( 1 ) Whether providing social security numbers is mandatory or voluntary ; ( 2 ) Any statutory or regulatory authority that authorizes the collection of social security numbers ; and/or ( 3 ) The uses that will be made of the numbers. Pursuant to 42 U.S. Code 408 ( 8 ), Penalties for whoever ; ( 8 ) discloses, uses, or compels the disclosure of the social security number of any person in violation of the laws of the United States ; shall be guilty of a felony and upon conviction thereof shall be fined under title 18 or imprisoned for not more than ( 5 ) five years, or both, except that in the case of a person who receives a fee or other income for services performed in connection with any determination with respect to benefits under this subchapter ( including a claimant representative, translator, or current or former employee of the Social Security Administration ), or who is a physician or other health care provider who submits, or causes the submission of, medical or other evidence in connection with any such determination, such person shall be guilty of a felony and upon conviction thereof shall be fined under title 18, or imprisoned for not more than ( 10 ) ten years, or both.

A clear & direct violation of FEDERAL REGULATIONS as well as the TRUTH IN LENDING ACT where penalties range from the following ; Twice the amount of any finance charge in connection with the transaction. 
25 % of the total amount of monthly payments under the lease, minimum {$200.00}, and maximum {$2000.00}. 
An individual action relating to an open-end consumer credit plan that is not secured by real property or a dwelling : twice the amount of any finance charge in connection with the transaction, minimum {$500.00}, and maximum {$5000.00} which could be even higher where a violation is evinced by an established pattern or practice of such failures. 
An individual action relating to a closed-end transaction secured by real property or a dwelling : either minimum {$400.00}, and maximum {$4000.00}, or, in the case of a class action, such amount as the court may allow, no minimum per each member of the class, and the total recovery in any class action ( or series of class actions ) arising out of the same failure to comply by the same creditor may not be more than the lesser of {>= $1,000,000} or 1 % of the net worth of the creditor. 

And in the case of a failure to comply with many TILA requirements set forth in certain sections of Regulation Z : an amount equal to the sum of all finance charges and fees paid by the consumer unless the creditor demonstrates that the failure to comply is not material. 

As far as FAILURE TO DISCLOSE goes, there was a negligence of transparency pursuant to Title 12 CFR 360.6 ( a ) Treatment of financial assets transferred in connection with a securitization or participation : ( a ) Definitions ( 2 ) Financial asset means cash or a contract or instrument that conveys to one entity a contractual right to receive cash or another financial instrument from another entity.

My Social Security number and signature on the application/contract is what gave the value to the instrument. My Social Security number and signature was used to create an Asset- Based Security ( aka ABS ). Which they failed to disclose.

( 3 ) Investor means a person or entity that owns an obligation issued by an issuing entity.

I am the investor it was my social Security number and signature that gave the credit to begin with. which I was not aware of, and they failed to disclose. 

( 4 ) Issuing entity means an entity that owns a financial asset or financial assets transferred by the sponsor and issues obligations supported by such asset or assets. Issuing entities may include, but are not limited to, corporations, partnerships, trusts, and limited liability companies and are commonly referred to as special purpose vehicles or special purpose entities. To the extent a securitization is structured as a multi-step transfer, the term issuing entity would include both the issuer of the obligations and any intermediate entities that may be a transferee. Notwithstanding the foregoing, a Specified GSE or an entity established or guaranteed by a Specified GSE shall not constitute an issuing entity. 

Discover card Execution note trust is the issuing entity the sponsor is Discover Bank and their trustee holds payment of my principal or interest evidenced by their indenture trust agreement with the United States securities and exchange commission that can be found in their 10-k report exhibit 4.1. As I look into the application/contract, they did not inform me in a clear inconspicuous way that I was giving them my security interest and all of my proceeds. No one would ever agree to terms and conditions. I will include a diagram how they are structured.

( 5 ) Monetary default means a default in the payment of principal or interest when due following the expiration of any cure period. 
Discover has defaulted on payments owed to me. 

( 6 ) Obligation means a debt or equity ( or mixed ) beneficial interest or security that is primarily serviced by the cash flows of one or more financial assets or financial asset pools, either fixed or revolving, that by their terms convert into cash within a finite time period, or upon the disposition of the underlying financial assets, and by any rights or other assets designed to assure the servicing or timely distributions of proceeds to the security holders issued by an issuing entity. The term may include beneficial interests in a grantor trust, common law trust or similar issuing entity to the extent that such interests satisfy the criteria set forth in the preceding sentence, but does not include LLC interests, partnership interests, common or preferred equity, or similar instruments evidencing ownership of the issuing entity. 

I am a security holder and the beneficiary of the security interest. I know that my beneficiary security interest is being held in a grantor trust. Discover also failed to provide how I would gain access to my security interest and that I have the option of opting out of that part of the contract and retaining my security interest, and all of my proceeds. 
This also can be found in their XXXX  report that is filed with the SEC. Which they failed to disclose.

Ferthermore I would like to bring to your attention 17 CFR 240.15 c3-3 Consumer protection, serves and custody of security. There are so much important information that is not being disclosed like ( e ) Special reserve bank accounts for the exclusive benefit of customers and PAB accounts. 

Why not disclose that I would say they are being deceptive and hiding what they are doing. I have the right to have access to my account. How could they ever say that Im late on a payment if they control and and have access to the funds that are in it.

( 2 ) Disclosure and record requirements.

( i ) except as provided in paragraph ( o ) ( 2 ) ( ii ), before a broker or dealer registered with the Commission pursuant to section 15 ( b ) ( 1 ) of the Act ( 15 U.S.C. 78o ( b ) ( 1 ) ) accepts the first order for a security futures product from or on behalf of a customer, the broker or dealer shall furnish the customer with a disclosure document containing the following information : ( C ) A statement indicating whether the customer 's security futures products will be held in a securities account or a futures account, or whether the firm permits customers to make or change an election of account type. 

I was never given a statement informing that I had that option. I would in courage you to read 17 CFR 240.15 c3-3 in its entirety as I only highlighted a very small portion.

As to FAILURE TO PERFORM, pursuant to 12 U.S. Code 83 ( a ) the General prohibition states : No national bank shall make any loan or discount on the security of the shares of its own capital stock. With this evidence present, how was a Extension of Credit ever presented by Discover to ME!? Ill tell you how. 

The initial credit application with my signature is what allowed Discover to access the credit to begin with. That credit application where my social security number and signature was used against my own will and without my knowledge was securitized and turned into an ABS or Asset-Based Security unbeknownst to me, operating in good-faith at the time. 

Now it made me asked myself where is the monthly payments going? If I was the one who gave the Credit to begin with. I found my answer in Discovers prospectus. 

Credit Card XXXX XXXX We securitize credit card receivables as a source of funding. We access the asset-backed securitization market using the Discover Card XXXX XXXX I ( XXXX ) and the Discover Card Execution Note Trust ( XXXX ). In connection with our securitization transactions, credit card receivables are transferred to XXXX. XXXX has issued a certificate representing the beneficial interest in its credit card receivables to XXXX. We issue XXXX XXXX notes in public and private transactions, which are collateralized by the beneficial interest certificate held by XXXX. From time to time, we may add credit card receivables to XXXX to create sufficient funding capacity for future securitizations while managing sellers interest. During 2023, we added $ XXXX of credit card loan receivables to the securitization trust, which increased sellers interest. As of XXXX, 2023, there were {$30.00} XXXX of credit card XXXX I would say that there are many more failures on Discovers part to disclose what they are doing and they are being deceptive. As you can see they are not operating in good-faith. Discover has said they are closing my account and my husband account. Im not sure how they can do this when they have not returned the security interest their trustee holds and the original application that gave the extension of credit to begin with. Without me/husband the application is worthless. It was our Social Security number and signature that brought the value. Discover Bank is a securitization agents all they can do is securitize the instrument where is our consideration? 

For further evidence see 15 U.S. Code 1602 - Definitions and rules of construction ( k ) The term adequate notice, as used in section 1643 of this title, means a printed notice to a cardholder which sets forth the pertinent facts clearly and conspicuously so that a person against whom it is to operate could reasonably be expected to have noticed it and understood its meaning. Such notice may be given to a cardholder by printing the notice on any credit card, or on each periodic statement of account, issued to the cardholder, or by any other means reasonably assuring the receipt thereof by the cardholder. 
A thorough investigation in to these violations and immediate action to rectify any non-compliance with legal provisions. Your prompt attention to this matter and timely response is appreciated in addressing these concerns.

Company response to consumer: Closed with non-monetary relief