Discover Accidentally Steals From Foundation To Pay My Credit Card

Phil (no, not the one who works here) had to make a payment to an art foundation, and learned that he could use his Discover card to do so. Neat! So he put the payment through, and all was well…until he learned that somehow the transaction went through backwards, transferring the money from the foundation’s bank account to pay his Discover bill. Oops. This seems like it would be easy enough to reverse, but Discover won’t do anything unless the foundation calls them up and nicely asks for their money back.

I needed to make a payment to an art foundation’s account to pay them for licensing rights for an image I’m using in a book. Their invoice provided their banking information. I called Discover to see if I could use my credit card to wire a payment to that account. The customer service agent indicated that I could do this and that there was no fee.

Two days later, i received an email from Discover thanking me for the payment – of precisely the amount I’d paid the art foundation. That’s strange. I called Discover to ask why they’d charged me instead of making a payment to the art foundation. I was told that they didn’t know what I was talking about, that I’d authorized a payment from my Citibank account to Discover. The problem is, I don’t have a Citibank account. The art foundation does!

Instead of wiring money to the art foundation, Discover used the banking information to withdraw money FROM the art foundation. While on the phone, I told Discover to give the money back, and I was told that they wouldn’t do so unless the art foundation contacted them and requested it.

HUH? They STOLE money from this account without authorization from the third party, and were insisting that the third party ask for it back?!? They’ve told me that they need 24 to 48 hours to listen to the tape to see if I authorized the transaction. I was told that it could take up to ten days to return the money, because they have to review the tape of my phone call.

It seems to me that evidence of a withdrawal from the third party vendor is all that’s needed in order to either stop a transaction OR to return money from a bogus completed transaction. But that’s just silly me!

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  1. Mr. Spy says:

    This is not the type of problem I usually have. I just cannot relate. Now, double charges on my card… Man, I have stories.

    • FacebookAppMaker says:

      I have only had a double charge once, and it was at the worst possible time. I was going to pick up smokes, and groceries. I decided on groceries first, that way if I spent too much, it would at least be on something I need, not on something my body needs (ADDICTION! HELL YA!). I made my payment at my local store, and realized I was still on budget, and could afford to treat myself to a pack of smokes, as I had only spent 250 of my ~440 and change in my account.

      I dropped the groceries off at my apartment, and went to pick up my smokes. Well, my transaction was declined for insufficiant funds. I used my phone to check my bank account balance, and noticed a negative amount.

      Not being familiar with double charges, I immediatly went back to the store, got a manager, and asked for my money back. He wouldn’t give it to me, as he claimed it was the banks fault (it actually was).

      So, I called my bank who told me it would take up to 48 business hours (This was on a friday, after hours, so I wouldn’t get my money until tuesday/wednesday) to get my money back. Wonderful.

      Now, I don’t know if the person reading this smokes or not, but if you are craving a smoke, know you have the money to purchase the smokes, only to find the bank cancer-blocks you… You get kind of agitated.

      Luckily, we had a late night pawn shop, so I sold an old laptop that wasn’t selling on eBay. Still, I was almost mad enough to leave TD.

      • Difdi says:

        It might be helpful to point out to the bank that while it might take up to 48 hours (or however long they claim it takes to conduct an instantaneous wire transfer), it only takes up to an hour to file a small claims lawsuit down at the courthouse.

        Just saying…

  2. Benny says:

    I’m still trying to figure out how this could have happened….??? You can use your Discover card to transfer money into a checking account? I don’t think so. I guess they thought you were trying to MAKE A PAYMENT to your account.

    • FatLynn says:

      I don’t know if you can actually do this, but I know you can write a paper “check” that charges to your discover, so an EFT isn’t that different.

      • Benny says:

        True. You could use those convenience checks. But he called in to request the transfer. You can not directly wire a payment FROM the card itself TO a checking account. You can however wire a payment FROM a checking account TO the card. I guess that’s how the mistake happened.

    • huadpe says:

      It wasn’t paid to his checking account, it was counted as a payment on his discover bill.

      That is, suppose he meant to give $75 to the art people. Instead of that, Discover took $75 from the art people, and acted as if he’d sent in a $75 check to pay on his credit card. His checking account remained untouched though.

  3. YouDidWhatNow? says:

    Discover: “Duuude, they totally didn’t even notice! Just shush!”
    Guy: “But it’s wrong, I don’t want you stealing from other people for my benefit…”
    Discover: “Come on, Dave…have one of these special brownies!”
    Guy: “…my name’s not Dave…”
    Discover: “Dave’s not here, man.”

  4. Nobody can say "Teehee" with a straight face says:

    Time to start wracking up huge bills and paying it off with random charitable organizations. Thanks for the charity, suckas!

  5. Sarahlara says:

    I made a payment to Discover once for something like $400, only someone there accidentally keyed it in as if I paid $3400. Easy enough to see what the problem was but it still took weeks to get my money back.

    If Discover ever needs loans, they know how to get them, apparently.

    • tbax929 says:

      Their customer service is not what it used to be. I’m seriously thinking about switching back to Amex.

      • Rachacha says:

        I hate Discover. I have several CCs, all of them with available credit limits well over $15,000 due to my past credit history (I never ask for credit limit increases, the banks usually just give them to me). I wanted to apply for a Discover card because they were offering a special promotion that would have been convenient to me. I applied for the card, and they set my limit at $400. I asked them if I could increase the limit, explaining my history with other cards, and a Discover card I had canceled several years ago. Even though they could see that I had no outstanding debt, maintained no balance on my cards, had a good payment history with my previous discover card, and was generally perfect credit wise, they denied my request for an increase of even $100 because they “had no payment history with me” To correct it, they suggested that I make a 1 small purchase and pay it off, and after 6 months, they would probably increase my limit to something closer to $10,000. I dug deeper, and the CSR said “Buy a pack of gum on your card, pay it off in full and that will establish a payment history sufficient enough to increase the limit” Just made no sense.

  6. PsychoRaven says:

    How is that even possible? Seriously? How the hell is that even possible?

    • Lyn Torden says:

      The CSR thought he was making a payment to his Discover account from HIS bank account. The problem is these numbers work both ways, even for wiring money. Anyone you give your account info to can TAKE money from that account, too. That’s one of the way our banking system is so totally insecure.

      What banks need to do for an account is give you THREE numbers for the one account. And these numbers need to NOT be sequential at all. One number will only be able to REFERENCE the account (cannot send or receive money). The 2nd is ONLY for sending money (cannot access anything else about the account except to be able to reverse only a sent amount within 48 hours and only if the money is still in the account). The 3rd is ONLY for taking money out of the account.

      And even that is only partially secure. A more secure system is possible, but it’s more complex to explain.

      • YouDidWhatNow? says:

        I knew a guy who had an irrational fear of overly intricate clusters of commercial buildings.

        He had a complex complex complex.

      • Bibliovore says:

        I like the multiple-account-numbers idea. My school wants everyone to authorize a bank account for them to put any refunds into, but their form authorizing this also authorizes them to withdraw money from the authorized account. The school says they just included that in case of people with payment plans and that they “almost never” take money out. I’d rather wait a little longer for any unexpected refund than risk having an error on the school’s side drain my bank account. Having a deposit-only account number to give the school would make that a non-issue.

  7. mcgyver210 says:

    Now that discover knows about the mistake it isn’t a mistake but in reality it is Electronic THEFT. If they did this to my account I wouldn’t have to ask nicely for my stolen $$$$s but instead would demand it or else.

    • Lyn Torden says:

      Once they know, give them a REASONABLE amount of time to fix it. In this case, REASONABLE is however long it takes for them to find a computer that can access the accounts database and look over the transaction that took place, and fix it. Less than an hour for sure.

      Then if they don’t, it’s lawsuit time.

      • mcgyver210 says:

        And since Discover like others charges for most everything, the foundation should be compensated in the form of a fee for misappropriating their funds.

        I am a merchant, trust me card services charge for everything they can.

  8. barbcole says:

    I can see it happening. It requires the OP asking for stupid thing, and a service rep that answered like most probably would. He or she will learn to assume the lowest level of logic from now on and triple confirm everything in different ways of asking…

    Hi if i have a bank account number can I make a payment with my Discover card?

    Sure, so you want me to process a payment with this new account information?

    Yes!

    • Difdi says:

      Asking for A stupid thing? Like what? Like using a credit card to pay for something?

      The nerve!

  9. Lyn Torden says:

    I’m at a loss on who to blame for this happening. Either Discover or Citibank. Definitely NOT Phil. You can be sure that this will end up being screwed up even worse.

  10. j2.718ff says:

    This is why I like the banking system in Europe. Electronic transfers from bank accounts as quite common there. They deal with the easy-access to account numbers through security. If I want to move money from my bank account, I get an SMS with a confirmation code. I enter the code, and the transfer goes through. If someone other than the account holder initiated the transfer, they wouldn’t know the code.

    • bd_ says:

      This would, however, require the end-to-end processing delay for the US banking system to be something less than three to five business days.

    • Difdi says:

      That prevents a third party from stealing, but it does nothing to stop the BANK from making an error (or outright theft).

  11. axolotl says:

    Top 5 Charities To Steal From In Order To Pay Your Credit Card Bill
    by Phil….

  12. whyerhead says:

    QUICK! Someone call Peggy….

  13. mike_bruns_99 says:

    I own a small business and use a credit-union for my business checking. Several of my employees also bank with the same credit-union. So, rather than issuing a check or going through a separate direct-deposit service, I call the credit union on paydays and just transfer the money from my business checking to their accounts. It’s easy and the money is available to them instantly.

    I hired a new employee and went through the process for her paycheck. I asked her to review her checking account to make sure it went through properly. She walked in to my office with a very sad look, and said “I think there’s been a mistake, there’s no money in my account. I mean, there is NO money in my account”.

    Sure enough, the credit union rep had reversed the transaction. I called, and 10 minutes later the problem was fixed.

    That is the benefit of a credit union. I called, got through to someone who had both common sense and the power to fix the problem. They fixed the problem instantly and insisted on personally apologizing to my employee.

  14. DovS says:

    Wow! Now I want to get a Discover card and make negative donations to organizations that I don’t like. This is the ultimate feature for a credit card!

  15. Levk says:

    This is why I record my convos lol

  16. Sarek says:

    Reminds me of the time I set up a credit union account for my mother. I filled out the cross-account form so that I could transfer money from my account into her account. The first time I went to move money from me to her, it failed. When I inquired, they told me the form only worked from her account into mine. But the only signature on the form was mine, hers wasn’t required!

    I told them since that’s how it works, I’d be happy to sign a form for every account in the credit union! They were not amused.

    I had to get my mother to sign the form that allowed me to move money into her account.

    I think this became the dictionary definition of back-assward.

  17. nearly_blind says:

    If I was the original victim I would file a police report and/or send certified letters to Discover and the Foundation ASAP. It wouldn’t surprise me if the transaction was later flagged by a Discover fraud department at some point on their own, or after the Foundation complains, and when it happens, that Discover claims the OV never alerted them and accuses the OV of fraud.

  18. Murph1908 says:

    The agent misunderstood.

    I highly doubt you are able to make a free transfer from a Discover card to a bank account. That sounds like a cash advance, which would incur fees.

  19. skapig says:

    So he doesn’t consider that maybe the foundation screwed up when processing the transaction? It’s possible and he should have talked to them anyway to inform them of the situation. Discover is correct that the payment processor needs to be given the opportunity to rectify the situation.

  20. atomoverride says:

    close your account and run.