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Discover Card - IRS Form 4506-C (Anyone ever had this happen to them?) (1 Viewer)

coopersdad

Footballguy
Sorry for so long.....

Back ground:

So about a month ago someone tried to steal my credit identity and take out a loan.  So I've frozen my credit at all 3 agencies, but for the last month I get a ton of texts / phone calls to try to get me to "finalize" my loan applications.  Experion just told me to ignore / block all the calls and texts as if you reply then they'll know that they have an active number.  This comes into play yesterday.

Jump forward to yesterday.......

My 2 sons (college and Sr. in HS) are authorized users on my Discover card and have their own card.  Easier than giving them cash, and that way they have a card in case of emergencies.  

So last night the oldest son is at school (out of state) and is trying to get gas.  His card gets declined.  Luckily he has his own debit card, and he pays with that.  He calls me to let me know that something was wrong w/ the discover card.  I'm at school board meeting, so I tell him I'll look at it later.

About 45 minutes later, younger son is coming home from baseball training about an hour away from our house.  He's by himself and stops to get a drink and gas.  His card is denied.  He drives to a second station.  Same issue.  So he calls me and I have to drive up there to pay for the gas to get him home (note to self, will be giving him emergency $20 to put in glove compartment).  

I call discover on the way home and ask "WTH has there been fraud on my account and you've frozen it"?  I've been w/ them for 24 years.  Credit rating is A on all 3 agencies.  They look into it and say that I need to call back in the morning as the department handling this "issue" is closed.  I ask, "what issue", but they can't tell me but they inform me that it "is not fraud".  They tell me to look in my email or voice mail.   So I look at my email and yes I did receive one.  I got it yesterday at 3pm and it said "your card is being placed on hold until you fill out the attached IRS form". And I did get a call (that I didn't answer) about the same time w/ the message of "this is discover please call XXX regarding your credit card".

I filled out the form last night at around 1030pm.

So I call back this morning.  Seems that they are doing a "routine" process where they get information from the IRS verifying income / etc. I tell them that I've filled out the form last night so "unhold my card". Also tell them that the income that they are going to see on my 2019 and 2020 returns are way more than what I used to obtain said card.  He tells me that due to COVID at the IRS, this process may take up to 2-4 weeks.  I'm like WTF???????

I have an issue with them accessing my tax information (for security purposes as we all know that the more places your information is the more likely it is to be hacked), but if that the process that we have to go through then fine, but to say "your card is on hold" immediately..............as opposed to "in 2 weeks your card will be placed on hold so please be aware".  I asked "what if I was out of a job, had no cash, and this was my only credit card............I'm not going to be able to purchase anything for the next 2-4 weeks"?  He had no answer.  

Anyone else had an experience with something like this? 

Needless to say, I vented to customer service (after telling him I was not mad at him, just the policy that is being followed) and am now expecting a call from some type of "supervisor" in the next 24-48 hours.

Maybe I'm just and old man yelling "get off my lawn".

It will all be fine.  It does not cause me any issue other than telling oldest to not use the discover, and giving my youngest a different CC, but still I'm miffed at how this can be a a well thought out plan.

 
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supermike80

Footballguy
coopersdad said:
Sorry for so long.....

Back ground:

So about a month ago someone tried to steal my credit identity and take out a loan.  So I've frozen my credit at all 3 agencies, but for the last month I get a ton of texts / phone calls to try to get me to "finalize" my loan applications.  Experion just told me to ignore / block all the calls and texts as if you reply then they'll know that they have an active number.  This comes into play yesterday.

Jump forward to yesterday.......

My 2 sons (college and Sr. in HS) are authorized users on my Discover card and have their own card.  Easier than giving them cash, and that way they have a card in case of emergencies.  

So last night the oldest son is at school (out of state) and is trying to get gas.  His card gets declined.  Luckily he has his own debit card, and he pays with that.  He calls me to let me know that something was wrong w/ the discover card.  I'm at school board meeting, so I tell him I'll look at it later.

About 45 minutes later, younger son is coming home from baseball training about an hour away from our house.  He's by himself and stops to get a drink and gas.  His card is denied.  He drives to a second station.  Same issue.  So he calls me and I have to drive up there to pay for the gas to get him home (note to self, will be giving him emergency $20 to put in glove compartment).  

I call discover on the way home and ask "WTH has there been fraud on my account and you've frozen it"?  I've been w/ them for 24 years.  Credit rating is A on all 3 agencies.  They look into it and say that I need to call back in the morning as the department handling this "issue" is closed.  I ask, "what issue", but they can't tell me but they inform me that it "is not fraud".

So I call back this morning.  Seems that they are doing a "routine" process where they get information from the IRS verifying income / etc.  And that I should have gotten an email or phone call telling me this.  So I look at my email and yes I did receive one.  I got it YESTERDAY at 3pm and it said "your card is being placed on hold until you fill out the attached IRS form".  I tell them that I filled out the form last night at around 1030pm.  He then tells me that due to COVID at the IRS, this process may take up to 2-4 weeks, but after that time, my card will not be frozen.

I have an issue with them accessing my tax information (for security purposes as we all know that the more places your information is the more likely it is to be hacked), but if that the process that we have to go through then fine, but to say "your card is on hold" immediately..............as opposed to "in 2 weeks your card will be placed on hold so please be aware".  I asked "what if I was out of a job, had no cash, and this was my only credit card............I'm not going to be able to purchase anything for the next 2-4 weeks"?  He had no answer.  

Anyone else had an experience with something like this? 

Needless to say, I vented to customer service (after telling him I was not mad at him, just the policy that is being followed) and am now expecting a call from some type of "supervisor" in the next 24-48 hours.

Maybe I'm just and old man yelling "get off my lawn".

It will all be fine.  It does not cause me any issue other than telling oldest to not use the discover, and giving my youngest a different CC, but still I'm miffed at how this can be a a well thought out plan.
Wow..Never heard of this!!!   That's crazy?   How the heck, in this world, are you nto supposed to think this is spam?   Just shocking your CC company woudn't at least warn you before they cut you off like that

 

coopersdad

Footballguy
Just got of the phone w/ them again, AFTER I got an email from ATT saying that our Uverse service bill was denied this morning.

I looked at the CC bill from the last 2 months and our Electricity, Hulu, Uverse, Spotify, Netflix, cell phones, baseball training, water, and lawn service are all paid on this CC. 

So I felt the need to let them know AGAIN about the frustration I was going to experience moving all these (or paying directly from checking).  She said "yes a lot of our customers feel the same way" and that "we process these in batches" so eventually every discover card will have it done. 

 

Dezbelief

Footballguy
I don't use discover anymore, they turned my card off one time when my payment wasn't received on time. I was a college student who paid off my balance in full every month, but missed getting a check in the mail that month. I only used it for ease of pay at the pump and usually put under $100 a month on the card. I canceled the card and never went back. Discover called me a year or two later saying they were reviewing old files and wanted me back, NOPE. I will never get another discover card and neither will wife or kids.

 
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Steve Tasker

Footballguy
I have no advice other than to say that the part about there being a huge backlog in IRS processing due to Covid is not a lie.

 

Juxtatarot

Footballguy
coopersdad said:
So I call back this morning.  Seems that they are doing a "routine" process where they get information from the IRS verifying income / etc. I tell them that I've filled out the form last night so "unhold my card". Also tell them that the income that they are going to see on my 2019 and 2020 returns are way more than what I used to obtain said card.  He tells me that due to COVID at the IRS, this process may take up to 2-4 weeks.  I'm like WTF???????
Apparently they have you flagged as high risk. Maybe caused by a lot of inquiries due to the identity theft? I guess a high amount of credit card/unsecured debt could also cause that.

 
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coopersdad

Footballguy
Apparently they have you flagged as high risk. Maybe caused by a lot of inquiries due to the identity theft? I guess a high amount of credit card/unsecured debt could also cause that.
0 credit card debt. 

Paid off every month. 

Only 1 Hard credit hit from the ID theft and that has been disputed. 

If I'm high risk, then we've got a serious issue in this country.  And like I told the customer service rep, I could really understand this if I was NOT the type of person that you want to do business with.  But then again, they only make money off my monthly transactions, but they have no risk (at least based on 37 years of credit history). 

I tried to explain to the lady that I'm a government bond (guaranteed return) not an investment in crypto. 

 

Dezbelief

Footballguy
0 credit card debt. 

Paid off every month. 

Only 1 Hard credit hit from the ID theft and that has been disputed. 

If I'm high risk, then we've got a serious issue in this country.  And like I told the customer service rep, I could really understand this if I was NOT the type of person that you want to do business with.  But then again, they only make money off my monthly transactions, but they have no risk (at least based on 37 years of credit history). 

I tried to explain to the lady that I'm a government bond (guaranteed return) not an investment in crypto. 
Discover 

 

Juxtatarot

Footballguy
0 credit card debt. 

Paid off every month. 

Only 1 Hard credit hit from the ID theft and that has been disputed. 

If I'm high risk, then we've got a serious issue in this country.  And like I told the customer service rep, I could really understand this if I was NOT the type of person that you want to do business with.  But then again, they only make money off my monthly transactions, but they have no risk (at least based on 37 years of credit history). 

I tried to explain to the lady that I'm a government bond (guaranteed return) not an investment in crypto. 
I don’t believe it’s random.  Something must be triggering it. 

 

BigJim®

Footballguy
coopersdad said:
So I call back this morning.  Seems that they are doing a "routine" process where they get information from the IRS verifying income / etc.
My initial instinct was this could be related to how Discover chooses to navigate Ability to Pay rules - i.e. they can't consider you for credit line increases with stale income, and getting consent to annually update your income via permitted access to IRS info is easier than repeatedly asking you to update your income). Credit card issuers struggle with this requirement. However, your experience of having your account restricted after so many years (including notably pre-CARD Act) strikes me as peculiar, if that is the case. Also, it's my rough understanding you should not be considered for line increase in any event if you have a bureau freeze. I'd be interested if you eventually find out what this was.   

 

BigJim®

Footballguy
FWIW, appears you are not alone, and this is something that's been going on to whatever degree for a couple years. Some give accounts of what Discover told them (random verification). There could be factors based on what income they have on file for you that may have semi-randomly selected you for verification (e.g. you gave $250K income, identifying as a student/retired). 

 

Chemical X

Footballguy
so, my background is a commercial credit approver.  done this for large banks, lots of times in centralized areas.  to help fight fraud on lower dollar credit requests, where financial info was not a requirement, i would randomly have the customer execute a 4506t, now a c form, which authorizes a 3rd party to see a transcript of your tex return.  this was a fraud measure for us on low touch apps under $100k.  generally, big banks credit score varying metrics and income obviously is a factor.  we would do this randomly, so as not to discriminate.  a credit card company asking me for a 4506c would make me say, thanks for the years, but i’ll be moving on. 

 

coopersdad

Footballguy
so, my background is a commercial credit approver.  done this for large banks, lots of times in centralized areas.  to help fight fraud on lower dollar credit requests, where financial info was not a requirement, i would randomly have the customer execute a 4506t, now a c form, which authorizes a 3rd party to see a transcript of your tex return.  this was a fraud measure for us on low touch apps under $100k.  generally, big banks credit score varying metrics and income obviously is a factor.  we would do this randomly, so as not to discriminate.  a credit card company asking me for a 4506c would make me say, thanks for the years, but i’ll be moving on. 
I'm not @chet, but make decent bank as a mid level mgmt in finance for a fortune 500 company. 

Only thing that I could maybe think of is my ex is blowing up her credit score (after having it at a A level pre divorce), and maybe I'm somehow tied into some reporting w/ her.  I've already applied on a my Chase card for the boys to be authorized users and moved all my automatic payments to another card (not as good as 2% cash back on all purchases, but I digress). 

Lady I spoke to earlier today said, 'we do this randomly to about 2% of our customers / quarter" and I said, there is no way in hell that you cut off 2% of your customer list for 2-3 weeks in a quarter.  Pretty hefty loss in revenues from CC fees (which is probably a very small portion of their revenue portfolio anyway), but still not chump change either.

So I'm already to go once I hear back from the supervisor.

 

Chemical X

Footballguy
I'm not @chet, but make decent bank as a mid level mgmt in finance for a fortune 500 company. 

Only thing that I could maybe think of is my ex is blowing up her credit score (after having it at a A level pre divorce), and maybe I'm somehow tied into some reporting w/ her.  I've already applied on a my Chase card for the boys to be authorized users and moved all my automatic payments to another card (not as good as 2% cash back on all purchases, but I digress). 

Lady I spoke to earlier today said, 'we do this randomly to about 2% of our customers / quarter" and I said, there is no way in hell that you cut off 2% of your customer list for 2-3 weeks in a quarter.  Pretty hefty loss in revenues from CC fees (which is probably a very small portion of their revenue portfolio anyway), but still not chump change either.

So I'm already to go once I hear back from the supervisor.
i note they said random.  but something likely flagged them to react.  sometimes random isn’t really, ahem, random.  tell them this seems less than random and more based on your ethnicity.  i’d just like to hear the answer.  curious why they need to verify your income here for an existing customer. 

 

coopersdad

Footballguy
I may have figured out the missing link and I had totally forgot about it.  Last Friday we tried to get my youngest a Discover credit card in his own name to start establishing his credit.  After we applied a screen popped up that said "your application is under review" and we'll contact you via mail with regards to the outcome. 

Today he got a letter that declined him a card (we had put down his income from the baseball lessons he gives as $1000/year) due to lack of credit history and insufficient income.  Since he's an authorized user on the card that got flagged and was "held", I'm betting there is some correlation that triggered some "warning".  Can't be a coincidence. 

 

BigJim®

Footballguy
I may have figured out the missing link and I had totally forgot about it.  Last Friday we tried to get my youngest a Discover credit card in his own name to start establishing his credit.  After we applied a screen popped up that said "your application is under review" and we'll contact you via mail with regards to the outcome. 

Today he got a letter that declined him a card (we had put down his income from the baseball lessons he gives as $1000/year) due to lack of credit history and insufficient income.  Since he's an authorized user on the card that got flagged and was "held", I'm betting there is some correlation that triggered some "warning".  Can't be a coincidence. 
Well, that could be related though his low income as an auth user really should not implicate your account in any way. Auth users aren't underwritten, because they are not responsible for card repayment.

FWIW, assume your youngest is age of majority as a High School senior? There are unique rules for < 21 applicants ability to pay, where the issuer can either determine independent ability or have a cosigner and consider cosigner income. You apparently went the first route, and I don't think it is possible for one with such a low income to meet any ATP test independently. It starts with monthly income and then bakes in other expenses appearing on a bureau. When no mortgage expense appears, they probably presume a value typical of your region for renting, and possibly other customary living expenses. You wind up with an expendable monthly income. The calculation presumes full utilization of the card account, but would be at least the monthly minimum payment for lower line assignments ($29, currently typical). I just can't imagine any calculation which begins with $83 monthly income, and adding in presumed living expense, leaving with ability to pay $29 monthly. 

A thin bureau is probably sandbagged with a recent application at least for 6 months. If you want your son to begin establishing credit in his name, you are likely stuck going the co-sign route at that income in a future application.

 

Major

Footballguy
I may have figured out the missing link and I had totally forgot about it.  Last Friday we tried to get my youngest a Discover credit card in his own name to start establishing his credit.  After we applied a screen popped up that said "your application is under review" and we'll contact you via mail with regards to the outcome. 

Today he got a letter that declined him a card (we had put down his income from the baseball lessons he gives as $1000/year) due to lack of credit history and insufficient income.  Since he's an authorized user on the card that got flagged and was "held", I'm betting there is some correlation that triggered some "warning".  Can't be a coincidence. 


Sounds about right.  Different situation but I had a nice bump in income and Discover unknowingly did the same thing to me when I noted it in my profile.  I called and they said it was a routine process, blah blah blah but never really explained why and I'm fairly confident the rep didn't have a clue either.   I went along with it until they told me the process would take roughly 60 days to get my account unfrozen and there was nothing they could do until the IRS got back to them. I ended up closing my account and denying them access to all the IRS stuff.  It just didn't seem right.  Never had this happen with any other provider.  

 

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