Discover Won't Let Man Opt Out Of Arbitration, Even Though Their Terms Allow It

When John signed up for a Discover card a few months ago, he noticed an interesting item in the fine print—he could opt out of binding arbitration if he sent in a written request that contained a few lines of necessary info and his signature. John followed the instructions, but Discover rejected it. Since then they’ve rejected his request a second time, failed to call him back when promised, and transferred him to CSRs who don’t know what the word means. The latest news: now that 30 days have passed, he’s no longer eligible to opt out. John’s thinking about canceling the card.

Here’s his story:

In June I signed up for an introductory 0% APR Discover Business card and after reading through the “Discover Business Card Account Card Member Agreement” pamphlet that came with my card I found on page 13 that I could voluntarily reject binding arbitration. The section reads:

  “You may elect to reject the arbitration of disputes section by providing us a notice of rejection within 30 days after receiving a card, at the following address: Discover Business Card, PO Box 30938, Salt Lake City, UT 84130-0938… You’re rejection notice must include your name, address, telephone number, account number and signature and must not be sent in with any other correspondence…”

Eager to retain my right to sue the good ole’ fashioned American way, I sent in my very own ole’ fashioned handwritten rejection of arbitration certified letter, attached below. You’ll have to trust me that my information is below the black bars :)

I sent the letter on June 19th (delivered the 23rd) and Discover got back to me on July 5th (delivered July 7th). The letter I got back says “Unfortunately, we are unable to honor this request since it did not contain all of the required information as set forth in the Notice of Right to Reject Arbitration. Enclosed is the Cardmember Agreement that pertains to your account.”

I wasn’t sure what I had done wrong, so I cut out the section of the enclosed booklet and attached it to my next letter (sent July 8th, delivered July 11th):

I clearly state that since Discover took a bit to reply I was no longer within the first 30 days of opening my account. Surely this time it would work?

Nope. August 6th rolls around and the same letter described above arrives in the mail with the same pamphlet.

So at this point I call in and ask around to see what’s up and nobody really knows what’s going on… Finally a “manager” says he will look into the problem and get back to me.

So a few weeks roll around until finally today I’m going over my bills and remember that nobody ever called me back, so I call in today and get redirected 6 times to 7 different people, with 5 cold transfers and only 1 warm transfer. I went all over the country hopping from call center to call center, each time explaining to a new Discover rep my entire story and in two cases spelling out A-R-B-I-T-R-A-T-I-O-N until finally I just began asking each operator right up front if they knew what arbitration was, and if so if they could figure out why I can’t get rid of it.

Guy numero 7 tells me that if I “reject binding arbitration or anything else in the contract, Discover will cancel the account.” After I point out again that I am granted the option of opting out, he tells me that my 30 days have passed and so I’m probably not eligible anymore to opt out, but recommends that I contact the legal department and gives me the address, which if you can guess is the same one I sent my original letters to already.

At this point I’m really frustrated and tell the rep that I’d like to close my account if I can’t resolve this issue soon, so he tells me that someone will “call me by Wednesday with an answer.”

This is my first Discover card and I’ve really enjoyed using it but I just don’t have the patience for this run around. I’ve spent two hours dealing with this and I just wish they could figure it out.

Have any of your readers been able to opt out of binding arbitration?

Has anyone with a Discover business card account tried this? If so, did it work for you? We can’t figure out what Discover thinks John is doing wrong, other than trying to opt out in the first place.

(Photo: Getty)


Edit Your Comment

  1. cotr says:

    love the “ad infinium” part.

    close it. if Family Guy made fun it, its not worth having.

    “an exclusive club called everybody”

  2. MameDennis says:

    I had no end of problems with my Discover card, and canceling it was the best decision I ever made. Run, friend, run like the wind.

    • tinycorkscrew says:

      @MameDennis: Certainly not the best decision you ever made. It’s much better for your credit score to keep it and not use it than to cancel.

      • MameDennis says:

        I canceled my Discover Card precisely because their mistakes were screwing up my credit rating. Did they fix each individual error? Yeah, but it was absolutely not a good investment of my time to have to call them every single month.

        And I repeat: Best decision I ever made.

      • zlionsfan says:

        @tinycorkscrew: If you have a credit line that represents a reasonable percentage of your overall credit, and you’re carrying a decent balance on your other credit cards, sure, it’ll have a noticeable impact. If you’re opening and closing other accounts too, that will have an impact as well.

        Aside from that, I’d say the impact on your credit score is probably outweighed by the relief of never having to deal with Discover again. Unless there’s a specific place the OP likes to shop that doesn’t take other cards, I think he might be better off moving to a card offered by a company that provides better service.

  3. FreemanB says:

    You could also always just keep the proof that you met the requirements. If you ever had to sue, you have proof that you met the requirements to opt out, a copy of the letter and proof of delivery. It would be fun watching them try to figure out something that followed their instructions exactly was rejected.

  4. Willow01 says:

    I used to work for Discover Cardmember Services in Phoenix….might I make a recommendation and cancel the card?

  5. econobiker says:

    If he has proof that he complied with their terms in within the first rejection letter and they have accepted the letter certified (return receipt I hope) he should be ok no matter what their phone droids say.

    He may not have used the correct verbage, however, in his first letter ie what they wanted him to say- the “ad infinitum” probably crossed them up…

  6. Nick says:

    No offense, but people should really take the time to send a business-format typed letter for official matters like this. Handwritten letters are completely valid, but people won’t take them seriously. Personally, this letter makes me think of all of the handwritten lawsuits filed by prison inmates.

  7. johnska7 says:

    Years ago, discover was my first credit card (got it in college at a table with a free tee-shirt). At the time, I was driving a crappy little car and it would cost me about $10 to fill up the tank.

    One day I get a bill from discover with a $40 charge at a local gas station. I immediately contest the charges with a phone call and I’m told that an investigation will start, but I still have to pay. I told them I would not pay because I know I didn’t spend $40 at this station (with no convenience store or garage, mind you), but unknown to me, my mother did pay the whole credit car balance about two days later.

    About a month later, I get a letter from discover proclaiming “We have contacted the business in question and included with this letter is the proof that you made these charges…” with an empty envelope. I proceeded to call, writing down names, numbers and times with all of this, and they tell me they’re going to launch a 2nd investigation, but at the current time they will not refund the now-payed $40.

    Two more months go by and I receive ANOTHER empty-except-for-a-proclaimation-letter envelope and, throwing up my hands in disgust, canceled the card and never looked back.

    Moral of the story? Get another card. One phone call to my old master card (canceled after my student days as it no longer applied) about a questionable purchase and they immediately put it on hold. When the operator told me the company name, I responded that I did indeed make the purchase but she refused to take the hold off until I called them so I could make sure I really made the purchase. That’s a great level of trust between company and customer, instead of company to company

  8. johnska7 says:

    Cancel it… I did after they refused to refund $40 at a gas station that I didn’t charge (in 1999 when my car took $10 to fill and the station sold nothing else besides gas).

    They investigated twice, sent me a letter twice that said the envelope contained proof from the business that I made the charges but the envelope contained nothing else, and in the time, the bill was mistakenly fully paid, so there was no way to get my money back.

    To this day I refuse to have any dealing with them.

  9. thinkliberty says:

    I would hold discover to the fact that you have already opted out according to the terms of the contract and you are not under terms of arbitration.

    Who cares if it is NOW after 30 days. You DID provide them a notice of rejection within 30 days after receiving your card as the contract states. that is all that is required, they don’t have to agree to it or like it.

  10. MyPetFly says:

    First, cancel the account.

    Second, with the money you saved by not having to pay interest, invest in at least a typewriter.

  11. BrAff says:


  12. Gopher bond says:

    My restriction terms stated that to opt out of the binding arbitration, you need to do so BEFORE using the card as using the card implies your acceptance of the terms (My assumption, not in the terms). So, if you used the card the day you got it but informed them later but within 30 days that you reject binding arbitration, they probably ignored it.

    • mythago says:

      @testsicles: The quote from the OP doesn’t say anything about ‘before you use the card’. Even if such a provision existed and the OP overlooked it, then Discover should be able to send out a form letter stating “as paragraph 34(a)j3k4 subsection 449,392 notes, you must exercise this right before using your card”, instead of jacking him around and then pretending he opted out late.

      As JulesWinnfield already pointed out, typewritten is preferred, but who cares? The OP did what he was supposed to do. The card company just doesn’t want to weasel out of being able to use their bought-and-paid-for private judges.

  13. Gannoc says:

    I vowed never to go with discover where, when I was at my first job paying off my credit card debt from college, I took an offer for a balance transfer from them.

    A month later I found out that I was only approved for 1/4th the amount promised (a much lower limit than any of my other cards), and that they had transferred just that amount over.

    So, I suddenly had a brand new, maxed out card on my credit report. Wonderful. The heck with them. ;)

  14. nightshade74 says:

    I canceled them as soon as they went “two cycle” billing.
    Run like the wind…

  15. oneliketadow says:

    What is wrong with a hand-written letter? Just because it’s hand-written doesn’t make it any less acceptable.

  16. Well, I’m not a lawyer, but I’d bet the OP has more than satisified his legal obligation to opt out of binding arbitration, should such an event occur that requires him to sue Discover.

    It would however be fun to see him sue Discover for failing to process his request and then have them try to force him to go to arbitration.

    So please sue, so we can all have a chuckle.

    • HonestNigerian says:

      @twophrasebark: Lol.. Your mind is amazing.

    • JulesWinnfield says:

      @twophrasebark: I AM a lawyer, and the dumbest thing Discover did here was send that letter to the OP. That letter is proof – pure GOLD – that Discover received his request to opt out of arbitration. That’s all the OP had to do.

      As for the remarks about the OP’s handwritten letter – some polite, some not – it’s always a good idea to send a neatly typed, grammatically correct letter. That’s good advice, which after all is the raison d’être of this web site.

  17. trujunglist says:

    The good news is that if you still have your account in the year 3000, then you’ll be able to buy the underwear that you saw in your dreams.

  18. Psychosocial says:

    I think you should seek legal council. It appears OP has satisfied his legal obligation(s) to opt out of the BA. I would indeed try to sue them. See what happens. I no longer have any faith in the Discover card. I cancelled mine eight years ago. No regrets whatsoever.

  19. Shadowman615 says:

    Sounds like a plain old scam. I’m sure they have an explicit policy to just flat-out deny all opt-out requests for binding arbitration. That alone should be a good indication of what kind of company you’re dealing with.

    But, like many have posted above, the OP has fulfilled his end of the contract and opted out, whether they accept it or not.

  20. startertan says:

    Hmmm…I’ve had my Discover Card (regular, non-business) for 12 years now and I’ve never had a problem with it. Good luck to the OP.

  21. Doofio says:

    In Discover’s defense, if I had received that letter, I would not have that the person that wrote it was over the age of 18, let alone possessed a credit card.

    Cancel the card, buy a copy of Word and a printer.

    • jswilson64 says:

      @Doofio: I’m using your logic for people who can’t formulate a sentence on a Consumerist post.

      WTF is this supposed to mean? “In Discover’s defense, if I had received that letter, I would not have that the person that wrote it was over the age of 18, let alone possessed a credit card.”

      Cancel your Consumerist account and buy a copy of Word, a dictionary, and a thesaurus.

    • bwcbwc says:

      @Doofio: Heck download a free copy of OpenOffice. No reason to spend a couple hundred on Word/MS Office.

  22. satoru says:

    Uhhh no offense to the OP but your handwriting sucks. I can’t complain since my handwriting also sucks! That’s why I TYPE my correspondence to companies. If I had no provenance I would have assumed such letters were a joke written by a 5 year old!

    You do have a legitimate grievance, but hand writing out stuff that resembles stuff from the Uni-Bomber is not helping your case.

  23. oneliketadow says:

    Just when you thought the BLAME the OP game was over, up comes this thread.

  24. Harlan says:

    If they did process his rejection of binding arbitration, they’d probably just close his card to new purchases. I opted out of a rate change on a card I’d had for years, and in exchange they prevented me from making any new purchases with that card. (That’s OK, though, as I had several thousand dollars on the card at a 5% interest rate, which is lower than any loan you can get anywhere at the moment.)

  25. dragonfire81 says:

    At the customer service call center I used to work at we received ABSOLUTELY NO TRAINING on arbitration whatsoever. None, nada, zilch.

    Anything I learned about I discovered on my own or through this site. That being said, I am not surprised you got bumped around to a bunch of reps who didn’t have a clue what you are talking about.

  26. yetiwisdom says:

    Also an ex-Discover customer that got fed up with their customer (dis)service. Went to AmEx and haven’t looked back. At all. Ever.

    I agree with the dozen posters who say you’ve already complied to the terms. Now its time to find a reason to sue.

  27. halo969 says:

    I love my Discover. Not a big fan of AMEX myself.

  28. Fly Girl says:

    I didn’t even make it through the whole post, but those hand written letters are priceless. They seriously made my whole day. I mean, obviously the OP has access to a computer– how else would he be emailing the Consumerist? And he took digital photos of the old school letter. I don’t know why he chose to send in a hand written letter, and I don’t think it was the best choice if he wanted to be taken seriously, but I love it. I love it, love it, love it. It’s like some abstract form of Consumerist performance art. Check out the old-timey legalese and the labeling of the ripped up pamphlet as “exhibit a.” I have a hunch that the OP is a funny, funny guy…

    • bwcbwc says:

      @Fly Girl: Crack my head open for a walnut. Seems like world+dog+me missed that point in this whole thread about handwriting. He must be one of those guys that refuses to show his receipts, too. Way to go!

  29. coach02740 says:

    “John’s thinking about canceling the card”. Huh? What’s to think about

  30. FLConsumer says:

    “We can’t figure out what Discover thinks John is doing wrong, other than trying to opt out in the first place.”

    He didn’t send it typed, on lawfirm letterhead. Do that and you’ll have their attention.

  31. ludwigk says:

    “ad infinitum” in his original letter makes no sense, since it means, “again and again forever”. He wants something to be in a constant state, not a repeating state.

    He could have said “in perpetuam” meaning, in perpetuity, although there’s no need for the excessive latin here. Perpetuity is even legaleze for “perpetually”, which is what he wanted.

  32. FreeIsGood says:

    Where (specifically) is arbitration usually mentioned in credit card agreements? I need to start paying more attention to this.

  33. Alger says:

    Oh, brother.

    So he hand-wrote a letter. It’s still legal, regardless of whether it disturbs anybody’s sensibilities.

    Personally, I was done with Discover years ago. When I got married, I added my wife to my Discover account. When I got divorced, I was told that to remove her and revert to an individual account, I’d have to close the account, and then apply for a new account.

    I stopped after step #1. I haven’t missed the account all all.

  34. ldavis480 says:

    As a past Discover card customer, I would like to state that I would prefer anal cancer over being their customer ever again. I have my own little story with them but I will spare you the sordid awful details except to say that they are the rudest, stupidest, mouth-breathing troglodytes one could ever have the misfortune to deal with.

    I strongly suggest going with a real credit card through your bank.

    Nobody takes the Discover card anymore anyway.

    Avoid at all cost.

  35. krispykrink says:

    Discover was one of my first real credit cards back in the 90’s. I only used the card twice and paid off the balance in full after each use. They canceled my account in less than 10 months and explained to me that they didn’t make any money off of people like me.

    I’m glad I’m no longer with them.

    • crashfrog says:

      @krispykrink: They canceled my account in less than 10 months and explained to me that they didn’t make any money off of people like me.

      Yeah, I guess you’ll have to use your debit card, instead.

      Oh, wait! You’re not supposed to do that, either!

      Hopefully your post will spell an end to the “debit card problems are your own fault; you should use a CC and pay it off every month” kind of post. Clearly, the CC companies won’t let you use your card that way, if you’re not carrying over a balance every month they’re going to cancel it.

      Your post highlights the fact that the idea that people’s banking problems are primarily a personal responsibility problem is a myth. The fact is, our banks are railroading us into behaviors that can’t help but result in fees. We’re being penalized for completely normal, expected use.

      It’s legalized microtheft.

      • bwcbwc says:

        @crashfrog: Well, if you charge $500 bucks a month or more and pay it off, they’ll still make money. I think their real problem with him was the “used it twice” part.

        I have to admit though, that I sometimes underpay my lowest interest cards for a month, just so I don’t fit any profile they may have for cancellation. That way I at least maintain the cards that give me the best value for my money.

  36. gatewaytoheaven says:

    Over at, they make it sound like Discover is one of the more premier credit cards to have (outside AMEX). I’m doubting that wisdom now.

  37. Ben Popken says:

    I thought it was pretty standard that if you rejected a card’s binding arb clause the account will get canceled.

    • AndrewJC says:

      @Ben Popken: Well, sure, except in cases where they give you an option. If it’s included as a valid option in the T&C, then they have no legal basis for canceling your account, though I suppose they can really close it for whatever reason they want.

      I almost want to open a Discover card just so I can try this same thing-almost-and see if they summarily reject me, too.

  38. BoomerFive says:

    I say run from Discover…run from it…like a boy in a field…

  39. Roycester says:

    John – you need to tell your story to consumers battling arbitration now at the public forum on

  40. xmod2 says:

    Well to be honest, handwritten letters aren’t always a bad idea.