Consumer complaint received 2024-07-12 00:00:00
Product: Credit card — General-purpose credit card or charge card
Issue: Fees or interest — Problem with fees
Company: Bread Financial Holdings, Inc.
State: CA

Complaint narrative:
As a preliminary matter, I would like to emphasize this is not about merely recovering interest and principal that should not have been charged. It occurs to me that if this is happening on my account as a result of an automated system or billing practice, it is almost certainly happening to others and the cost to XXXX XXXX could run into many millions of dollars lost to a fraudulent practice by Bread Financial. 

On XX/XX/year> XXXX fraudulent charges appeared on my Bread XXXX credit card. I had a XXXX balance on this card at that time because I had not used this high-interest rate card for many months prior. These charges were from a business called XXXX XXXX XXXX evidently company in XXXX, in the amounts of {$15.00} and {$610.00}. The total bill appearing in my paperless billing was for the amount of those two charges, or {$630.00}. 

It is critical to note at this point that I had auto-pay set up on this account so that in the event a bill was ever missed at least the minimum payment due would be made and there would be no damage to my credit score. 

Logging into my account in or around XX/XX/year> I noticed this balance, that my autopay had made payments against this balance and interest charges were added. The fraud department took a report and stated it would investigate the charges. It is my belief that federal law prohibits any bank from collecting, or trying to collect, any portion of payment that is disputed. In this case, the dispute should have brought the collectable account balance XXXX during the pendency of the dispute. 

Nevertheless, though Bread Financial took the fraud report, it did not investigate and continued to bill on what I assumed would be a quickly closed matter. When I called back a couple of months later to inquire as to the results of the investigation, I was told that the notes indicate that the fraud report was taken but never investigated or acted upon. The fraud representative again took a report, apologized for the " mix-up '' and stated she'd investigate. 

When I checked back on my latest statement I saw that as of XX/XX/year> I was still being charged {$30.00} per month on autopay when billing should have stopped entirely. Yet for each of the months from XXXX to XXXX I was being billed {$30.00} per month on principal and interest for what should have been a XXXX balance. This is the gravamen of this complaint. I do not believe Bread Financial is permitted to keep billing, especially over a XXXX month period, while there is an open investigation on these charges. And if this is a violation of law and it is happening to me, it is happening to every card holder that has disputed a charge. 

As an additional issue, now resolved but worth noting, I paid a total of {$150.00} for XXXX months ( $ XXXX x XXXX ). I closed my account over this nonsense and my final bill stated I would be credited back the sum of the original charges, or {$630.00} against the balance owing plus finance charges of {$13.00} and {$0.00} against the XXXX purchases, totaling {$13.00}. However, the finance charges were calculated wrong such that the refund I was to receive against the now-closed account was {$100.00}. Clearly, I'd paid {$150.00} in payments ( which I should not have been required to do in the first instance ) against these fraudulent charges and when this card issuer resolves the issue XXXX months later I'm shorted {$42.00} in interest and/or fees that should have been credited back? 

I called Bread Financial and a representative looked at the situation and promised to refund the whole {$150.00}. This too is not something I think just happened to me in this isolated incident. A bank getting the numbers wrong should not happen. I am pretty astute when it comes to things like this but I'd suspect most consumers are not and would not catch their " error ''. Indeed, I too may never have because I would not have been able to quickly and easily calculate what interest should have been credited back on the disputed portion of a balance vs. an undisputed portion. Fortunately, in this case, it was obvious since the entire balance was due to fraudulent charges and therefore the fact that I was not getting back all payments plus interest and fees on these charges was obvious.

Company response to consumer: Closed with monetary relief