What the heck is going on with Synchrony?

[Anonymous]

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Also i want to add, when i said balance i am not saying that i am carring balance, without me knowing all SB account balances show up on my credit report way before the closing day, i read here that the same happned to others and SB does it.

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I don't think the balances are the issue here. 7 accounts from any one lender is a lot, and especially if some of the accounts are only used every 2 or 3 months.

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Are you saying (or thinking) that because i have 7 SB accounts and haven't use 1 of those credit card in 3 months my accounts were locked? 

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I don't think humu or anyone is saying that. Just speculating as to the cause in general terms. Remember this is all speculation. Wishing you the best.

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I know, we all lost here, i got him/her i was just asking if that was in him/her opinion based on what we are seeing so far the reason for my my accounts got locked, no disrecpect here, i was just asking and not implaying 

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Since none of us are Synchrony Bank, we can only look at factors that may stand out and give our best estimate. We know for a fact that Synchony has been lowering credit limits on some myfico member accounts that go months without usage, so minimal account usage is a factor that is at least on their radar screen. That doesn't mean it's the only factor.

Again, none of us know their exact triggers, but it seems very reasonable that a bank would be concerned upon review about giving out 97k in credit lines and having only $10-$50 per card used every 2 or 3 months. We've seen this happen with other banks as well.

Remember something valuable and important that we also learned from the Comenity situation - the department that gives out credit and the department that reviews accoutns are two very different departments, who may make decisions that don't always line up with one another.

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Thanks, humu...

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You are welcome. We're all here to help one another, so pulling out factors isn't personal to anyone or an assessment that you've done anything wrong - it's a way we can find common denominators to help prevent this from happening to others.

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Exactly!

[Anonymous]

Another factor could potentially be rapid acquisition of credit overall, or rapid acquisition of Synchrony accounts close together.

Synchrony may allow a person to open 6 accounts in a 4 month period, but that doesn't mean the review department doesn't look at it later, become concerned, and decide to put the brakes on.

[Anonymous]

I still think it's not really about the individuals...  {and to those individuals who are being hit with freezes/reviews, I am sorry you are dealing with that hassle}

Slow day at the office, so I did a little reading lol

Synchrony suffered a stock trading price drop last month after it announced that it thinks its previous prediction on NCO for the year (how many charge-offs it expects to have on its accounts) was too low - they said that they now expect a higher number of charge-offs this year.  Which is crushing news to its investors.

So the investors sold en masse, and the stock price dropped something like 14-15%.  Not good.  Capital One and Discover also took a  hit, by the way, in reaction to Synchrony's statement.  Basically, investors holding stock in these credit card issuers got nervous and dumped their stock, causing each bank's stock price to fall a bit, with Synchrony taking the biggest hit (the others took about a 5% hit).

So, if you're Synchrony, you need to come up with ways to regain investor trust.

Never mind that you're actually a well-backed stock with plenty of financial experts actually recommending you to investors.

You can run the numbers again.  But you need better data.  Not just speculations... so you need information from your account holders.

You are only concerned about the ones who - for whatever random reason - fall into your "might eventually become a charge-off" category.

I am NOT saying here that anyone who is currently going through this freeze stuff is actually expected to become a charge-off, or that anyone is not planning to use their Synchrony account(s) responsibly, or anything like that.  

People who do not use large credit limits may fall into a "bust-out" watchlist.  I think someone brought up bust-out issues much earlier in this discussion.  Basically, bust-out is a form of credit fraud where the perpetrator gets several credit accounts and maintains them properly, uses them, pays them, grows the limits, and then - suddenly - disappears, stops paying, and falls off the face of the earth (lenders cannot locate them).  The lenders are left with large charge-offs once they give up trying to find the perpetrator.  I am NOT saying that anyone here is planning this - but to a computer who is programmed to find people who might look like a future perpetrator of bust-out fraud, they are not looking at each person individually, they are just looking at accounts open, credit limits, usage, etc. and applying some mathematical algorithm to decide if that person is a higher risk.  Likewise people whose incomes are in question, or who asked for large limits in a relatively short timespan then never used them, or who have opened a number of accounts in a short time period, or anything else that might "red flag" someone whose profile is being examined by a computer program.  Again, nobody including Synchrony is saying there's anything wrong with any of those activities - it's just going to flag an account.

Back to Synchrony, they have to reassure investors.  So they need to be sure they aren't proven right on the expected increase in charge-offs.  They need information for this - they need to prove that each of the people on whatever list they are using are not as high a risk as they expect.  They are verifying income in some cases, to show that the account holder can handle the account.  They are verifying identity in some cases, to show that the person holding the account really is who they say they are and really does live where they say they do - since false identity and/or contact information is an indicator of bust-out.  They are putting some folks under scrutiny, and as we all know, there is no clear (to us, anyway) definition of which accounts are being reviewed and which aren't.  Synchrony's goal is regaining shareholder confidence, it is just  unfortunate that they are kind of stepping on some account holders' toes to do so.

Synchrony last week released a dividend/buyback announcement as well.  Another ploy to make their stock more attractive.  It indicates that returns will be above what financial experts were expecting on their stock this year, and should help them to increase stock prices by increasing demand.

Here are a couple of the articles I read through, if anyone is interested.  Like i said, slow day at the office lol

http://blogs.barrons.com/stockstowatchtoday/2016/06/14/uh-oh-synchrony-financial-sees-more-bad-loans...

http://www.wsj.com/articles/why-synchrony-financial-spooked-the-credit-card-industry-1465923516

http://blogs.barrons.com/incomeinvesting/2016/07/08/synchrony-financial-up-5-on-dividend-buyback/

[Anonymous]

Yes, we've seen the articles about Synchrony having financial issues; these articles have in fact been posted in various Synchrony threads several different times - but these freezes would need to be about both a combination of Synchony's troubles AND also about the individual profile. Both are relevant factors.

They're not just picking people randomly out of a hat to freeze their accounts.

[IgnatiusReilly]

This has been an interesting thread and although thus far everything has been anecdotal, I think the one thing we can all agree on is that Synchrony hasn't exactly covered themselves in glory.

1.  The $500 SL to $10k recon makes absolutely no sense.

2.  The way Synch is just shutting off cards (assuming cardholder is current, etc.) can be devastating to customers... imagine being in the midst of travel (or settling up at a restaurant) and having to scramble for plan B.

3.  Synch has been, it seems to me, stonewalling cardholders trying to find out what the hell is going on.  

I get it, if a bank is going to take AA they do it before they stand to lose more and have to do it quickly.  If a bar owner tells me he is stopping my bar tab in an hour and throwing me out for good after that, I am drinking double 25 y/o MacCallan until I pass out.  I have nothing to lose at that point except consciousness.  

Whether it is 1,000 or 100,000 cardholders Synch is going to have some explaining to do.  I don't follow social media, so I am curious if those getting cut are expressing their displeasure via Facebook or Twitter.  And to be honest, I don't care enough to check.  

[Anonymous]

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@IgnatiusReilly wrote:

This has been an interesting thread and although thus far everything has been anecdotal, I think the one thing we can all agree on is that Synchrony hasn't exactly covered themselves in glory.

1.  The $500 SL to $10k recon makes absolutely no sense.

2.  The way Synch is just shutting off cards (assuming cardholder is current, etc.) can be devastating to customers... imagine being in the midst of travel (or settling up at a restaurant) and having to scramble for plan B.

3.  Synch has been, it seems to me, stonewalling cardholders trying to find out what the hell is going on.  

I get it, if a bank is going to take AA they do it before they stand to lose more and have to do it quickly.  If a bar owner tells me he is stopping my bar tab in an hour and throwing me out for good after that, I am drinking double 25 y/o MacCallan until I pass out.  I have nothing to lose at that point except consciousness.  

Whether it is 1,000 or 100,000 cardholders Synch is going to have some explaining to do.  I don't follow social media, so I am curious if those getting cut are expressing their displeasure via Facebook or Twitter.  And to be honest, I don't care enough to check.  

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Definitely they have not covered themselves in glory!!!

[UncleB]

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@IgnatiusReilly wrote:

This has been an interesting thread and although thus far everything has been anecdotal, I think the one thing we can all agree on is that Synchrony hasn't exactly covered themselves in glory.

1.  The $500 SL to $10k recon makes absolutely no sense.

2.  The way Synch is just shutting off cards (assuming cardholder is current, etc.) can be devastating to customers... imagine being in the midst of travel (or settling up at a restaurant) and having to scramble for plan B.

3.  Synch has been, it seems to me, stonewalling cardholders trying to find out what the hell is going on.  

I get it, if a bank is going to take AA they do it before they stand to lose more and have to do it quickly.  If a bar owner tells me he is stopping my bar tab in an hour and throwing me out for good after that, I am drinking double 25 y/o MacCallan until I pass out.  I have nothing to lose at that point except consciousness.  

Whether it is 1,000 or 100,000 cardholders Synch is going to have some explaining to do.  I don't follow social media, so I am curious if those getting cut are expressing their displeasure via Facebook or Twitter.  And to be honest, I don't care enough to check.  

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+1

@I don't do social media, but I do have a 'throw away' twitter account for Amex Offers (of course!) and I just checked out @asksynchrony. 

That page is a hot mess... again, I'm not a expert on social media but I don't see how anybody is getting anything done.  It's full of seemingly miscellaneous complaints... I'm talking everything from digital certificates to password issues, and many referrals from their partner store's various twitter handles.

Someone who is more skilled in social media than I am might be able to make heads or tails out of it (even more impressive would be if the twitter CSRs were actually able to solve a problem) but this is a task for someone with more tricks than me.

[Anonymous]

At this point, as far as I am concerned, Sync can FOAD. They told me last week that they mailed me a letter on 7/3. That was a flat out lie. There is no way I wouldn't have gotten it in the mail, period.
I just called them and closed ALL of my accounts. I don't NEED them at alll.

And they can't just TELL ME what they want from me on the phone. I have to wait for the nonexistent letter. I pay my bills early. The least they could've done was be HONEST AMD FORTHCOMING with me, their customer

[Anonymous]

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@UncleB wrote:

@I don't do social media, but I do have a 'throw away' twitter account for Amex Offers (of course!) and I just checked out @asksynchrony. 

That page is a hot mess... again, I'm not a expert on social media but I don't see how anybody is getting anything done.  It's full of seemingly miscellaneous complaints... I'm talking everything from digital certificates to password issues, and many referrals from their partner store's various twitter handles.

Someone who is more skilled in social media than I am might be able to make heads or tails out of it (even more impressive would be if the twitter CSRs were actually able to solve a problem) but this is a task for someone with more tricks than me.

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Yipe.

Thank you for letting us know, UncleB.

[Anonymous]

I'd like to test a theory. We all know that multiple factors are involved in freezes and closures, and that we're not abele to isolate just one factor necessarily.

That being said, has anyone had their accounts frozen who has at least one longstanding Synchrony account (3 plus years)? That factor cannot stand alone, since someone with a longstanding Synchrony account could also have just opened up 5 more of them in the last 2 months, which would be a potential flag.

Would be interesting to know if anyone has had an account frozen or closed who has a longstanding relationship with Synchrony of 3 + years. it's just a factor I'd like to get some data on, and am not saying it has any more weight nor importance than other factors.