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Shady SSCRA practices by Discover???

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S

slaveofthegov

Guest
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.

If this is a normal practice for Discover, I wonder how many other service men and women have been affected.

v/r
Scott
 


mac105

Member
Pa.
The larger amount should have still been treated the same as before with the exception of the interest change to 6%. There should have been no new account opened by Discover. Any charges you made should be on the same account. If a new account WAS opened, it should also be at 6%. Also, if you research SCRA, you will see that in the time you are in the military and are paying 6%, once you are OUT of the military and the interest rate goes up, you are not to be charged the difference in interest rates. Man, that sounds confusing. If you pay, for example, $6.00 interest a month for the duration of your enlistment, and the interest goes up to $20 a month whne you get out, 'they' can't say that you must pay x years worth of 414 extra a month b/c they gave you a break. Still not coming out right, but hopefully you can understand a tired brain! You and I both posted in August on an SCRA question. I have copied and pasted my reply. Send your post to the site or man mentioned below. Whether the response comes from him or someone else from that site, I know you will get your question answered. Good luck!

http://www.bankersonline.com/lending/sscrapage.html
Old 08-10-2004, 12:20 AM
mac105 mac105 is online now
Member

Join Date: May 2003
Posts: 33
Scra
Even though this is an old question, I am still posting this reply for anyone else that may have this question. There is a name below that will give you (in my case) same day answers.
I am sorry that I haven't checked this site for a while. This SCRA stuff is still fresh in my mind having researched it for my son in the past few months. I hope in the meantime, someone has been sympathetic enough to help you with this problem, but as far as the SCRA goes, this interest reduction does apply to installment loans incurred prior to active duty. And trust me, some companies still give a hard time about granting it. And by the way, that bankersonline.com will give you quick answers. This is the man I questioned, even after having all the info I needed, I still needed someone's help. Andy Zavoina CRCM
BankersOnline.com
1800 Crestview Dr.
Killeen, TX 76549-1122
(254) 526-8798
(888) 229-8872 x804
(512) 233-0649 fax
Good luck with this problem. I hope something goes right for you.

108th Congress Report
1st Session HOUSE OF REPRESENTATIVES 108-81
======================================================================
SERVICEMEMBERS CIVIL RELIEF ACT
_______
April 30, 2003.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
SEC. 207. MAXIMUM RATE OF INTEREST ON DEBTS INCURRED BEFORE MILITARY
SERVICE.
``(a) Interest Rate Limitation.--
``(1) Limitation to 6 percent.--An obligation or liability
bearing interest at a rate in excess of 6 percent per year that
is incurred by a servicemember, or the servicemember and the
servicemember's spouse jointly, before the servicemember enters
military service shall not bear interest at a rate in excess of
6 percent per year during the period of military service.
 
S

slaveofthegov

Guest
I was finally able to contact somebody at Discover that could help me. This is what happened. They took my "prior to military" balance and basically hid it...to be applied re-instated at a later date. They did not charge interest, service, or finance charges. When I questioned her about the fact that the SSCRA was supposed to limit my interest to 6% so that I could better be able to pay off the debt, she replied with "well, there was no interest charged on the account since you have been in the military." She also stated that since I was still in the military and had not had a break in service that Discover would re-apply the SSCRA to my balance and drop the balance back down to the original amount.
 

mac105

Member
PA.
I am glad you were able to talk to someone. As long as you are satisfied regarding this matter, that's what counts. But please remember the info and website that I posted earlier ... just in case. Again, though, it's good you found someone to talk to.
 

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