What is the name of your state? TX
I am currently serving overseas and have recently encountered problems with a Discover card account that I thought I paid off.
In October of 1998, I applied to Discover Card for coverage under the SSCRA. This application was accepted by Discover Card. In February of 2000, I called Discover Card to find out what my Pay Off Balance was and subsequently paid the amount. I recieved a letter stating that my account was closed and a letter would be sent to the Credit Reporting Agencies stating this fact (I still have the letter).
Recently, I have been hounded by collection agencies representing Discover Card. It took me a while to notice that the account number they were trying to collect on and the account number that I paid off were two different numbers. I tried to contact Discover Card and kept getting the run around since the account was an old account and since it was sent to a collection agency. I finally sent a written letter to contest the account to the collection agency. It was forwarded to Discover Card.
I then called Discover Card, and lo and behold, they can now access my information and help me.
My understanding of the SSCRA is that it provides a cap of 6% interest on all loans that were in effect prior entry into the Military. Based on that, I do not understand the following explination given by Discover Card:
The representative stated that upon coverage of the SSCRA, I had a balance of $1653.05. She stated that once the SSCRA was applied to the account, this amount ($1653.03) was "put on hold" and not charged interest or fees until I completed my military service. She stated that a new account number was then opened, by Discover, and applied to my existing account for new purchases.
She stated that the amount that I "paid off" ($652.03) consisted of purchases that I made after signing up for SSCRA. I am not questioning whether I have to pay charges made after signing up for SSCRA.
Since I requested my balance and paid said balance, I believed that my account was paid in full. I proceeded to cut up the card and have not used it since payoff. I also did not remain in contact with Discover Card. The representative stated that upon the expiration of my initial enlistment, the amount $1653.05 was then added back to my account, and subsequently has grown due to late fees and penalties. Well, I re-enlisted in the military and have not had a break in service. As stated above, I did not forward Discover Card my re-enlistment paperwork because I thought that the account was paid in full.
It was my understanding that according to the SSCRA, a 6% cap on interest would be applied to my existing balance, in order to assist me in paying off my account.
Basically, my question is, does/did Discover Card have the right to "hide" my balance of $1653.05 and then after my initial contract with the military was up re-apply that balance. Or should the balance have remained open and charged at 6% interest. At the time that I called Discover to find out my pay off balance, I would have paid the full amount no matter what it was.