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Discover Is Asking For Signed Consent

ItsCASHual
Regular Contributor

Discover Is Asking For Signed Consent

Received an email from Disco asking me to sign consent for IRS 4506-C form. When I open it, it's really a form 4506-T, which is normally a tax transcript from IRS for income verification.

 

The strange thing is that I've had the Disco card for over 3 years and have not provided any income to them since the day I opened the account, nor have I requested any CLI. My limit is $5K only by there auto CLI given to me (never requested one). So I call to inquire about it and they tell me that they are having all card members eventually go through this process (in batches) to comply with credit/ lending requirements per the IRS. Then the CSR says anyone who does not complete the verification process within so many days (2 weeks I think he said), their Disco account is automatically closed for non-compliance.

 

I'm speechless. Have any of you Disco holders come across this yet?

 

FICO 8

Message 1 of 27
26 REPLIES 26
thornback
Senior Contributor

Re: Discover Is Asking For Signed Consent

Yep.  Started in late 2019 and revved up in the beginning of 2020 -- they even requested it for those with secured cards.  Your online account is likely locked right now too and your card will be declined if you attempt to use it.  If you don't comply with the request, they'll shut you down.   If the income you stated on your app doesn't match your tax transcripts,  they'll shut you down.   And income not matching could be because you received a raise or a new job/new income that you haven't yet reported to IRS, or maybe you filed as an individual but used your household income on your app, etc.   

 

So long as everything matches - you should be fine.   Alternatively,  you can opt to not comply and close your card before they do so at least it'll be notated as 'closed at consumers request' on your reports as opposed to 'closed by credit grantor'. 

 

Here are the search results for this topic --- you may want to read through so you have a better idea of what to expect:

https://ficoforums.myfico.com/t5/forums/searchpage/tab/message?advanced=false&allow_punctuation=fals...

 

Good Luck.

 

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 11/2020: EX 780 ✦ EQ 771 ✦ TU 781
Current FICO 9s | 11/2020: EX 793 ✦ EQ 780 ✦ TU 778
2020 Goal Score | 800s


My AAoA: 3.8 years not incl. AU / 4 years incl. AU
My AoOA: 7.10 years not incl. AU / 9.10 years incl. AU
Inquiries: EX 0/6 | 1/12 ✦ EQ 1/6 | 2/12 ✦ TU 0/6 | 1/12
Report Status: Clean


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 2 of 27
ItsCASHual
Regular Contributor

Re: Discover Is Asking For Signed Consent

Interesting. Thanks @thornback!

My income has increased each year since Disco and I started out 3 yrs ago. So, my reported income at that time was less than what the 4506 form would say today. It seems odd that they would close me out in this instance. And, yes, I always report my "current" income accurately as to what my taxes would say on any applications at the time. I have no worries there.

 

I'm not sure yet if I'm willing to give them access. I have a few days to ponder it. Navy and I have a close relationship and their cards are my daily drivers so Disco and I may be headed for a break up.

FICO 8

Message 3 of 27
LaHossBoss
Senior Contributor

Re: Discover Is Asking For Signed Consent


@ItsCASHual wrote:

Received an email from Disco asking me to sign consent for IRS 4506-C form. When I open it, it's really a form 4506-T, which is normally a tax transcript from IRS for income verification.

 

The strange thing is that I've had the Disco card for over 3 years and have not provided any income to them since the day I opened the account, nor have I requested any CLI. My limit is $5K only by there auto CLI given to me (never requested one). So I call to inquire about it and they tell me that they are having all card members eventually go through this process (in batches) to comply with credit/ lending requirements per the IRS. Then the CSR says anyone who does not complete the verification process within so many days (2 weeks I think he said), their Disco account is automatically closed for non-compliance.

 

I'm speechless. Have any of you Disco holders come across this yet?

 


There is a mega thread in the credit card section about this. It seems most people getting it are new secured card accounts and new second card accounts, although there are reports of current cardholders getting this request, too, for no apparent reason.

 

I felt like this is something everyone will have to do this, but there has been debate about that. What you state from the CSR I feel is likely accurate.

 

They were accepting bank statements in lieu of 4506T because it was taking a long time to request, but when my SO had to do it and had issues submitting the 4506T request, they would not accept them, so it is on a case by case basis, and since he was unable to submit the 4506T form, his account got shut down.




Starting Score: 2•20 | EQ 550 | TU 498 | EX 505
Current Score: 7•21 | EQ [F8 645] [F9 651] [EQ5 684] [VS3 630] | TU [F8 717] [F9 692] [TU4 723] [VS3 643] | EX [F8 714] [F9 675] [EX2 681] [VS3 674]
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Message 4 of 27
thornback
Senior Contributor

Re: Discover Is Asking For Signed Consent

If your reported income is higher than whatever you've told Disco, there should be no issue. 

 

Now, whether or not you want to give them access is, of course, a personal choice.   I closed my card when they requested it from me (my card was 2 years old at the time of the request) because they were using Equifax as the intermediary with the IRS and this was right after the big Equifax breach -- I just could not bring myself to allow Equifax access to my tax transcripts... and my theory was that EQ would use this data to build upon their own income verification database.   I even asked Disco if there was another option, like linking directly to IRS or supplying paystubs and they said no.   It's been a year since I went through this so things may have changed - not sure if Equifax is still involved.

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 11/2020: EX 780 ✦ EQ 771 ✦ TU 781
Current FICO 9s | 11/2020: EX 793 ✦ EQ 780 ✦ TU 778
2020 Goal Score | 800s


My AAoA: 3.8 years not incl. AU / 4 years incl. AU
My AoOA: 7.10 years not incl. AU / 9.10 years incl. AU
Inquiries: EX 0/6 | 1/12 ✦ EQ 1/6 | 2/12 ✦ TU 0/6 | 1/12
Report Status: Clean


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 5 of 27
Aptus
Regular Contributor

Re: Discover Is Asking For Signed Consent


@thornback wrote:

If your reported income is higher than whatever you've told Disco, there should be no issue. 

 

Now, whether or not you want to give them access is, of course, a personal choice.   I closed my card when they requested it from me (my card was 2 years old at the time of the request) because they were using Equifax as the intermediary with the IRS and this was right after the big Equifax breach -- I just could not bring myself to allow Equifax access to my tax transcripts... and my theory was that EQ would use this data to build upon their own income verification database.   I even asked Disco if there was another option, like linking directly to IRS or supplying paystubs and they said no.   It's been a year since I went through this so things may have changed - not sure if Equifax is still involved.


This is distressing as I work on commission so my income fluctuates a great deal year to year.  This year it was far lower than anticipated and I have been debating updating the income information on Discover's site, but didn't want to draw any unwanted attention and was leaning towards a 'wait and see' approach.

 

However, if it appears that it is more of a matter of "when" rather than "if", it may be better to update the income with the new tax filings for 2020 and hope that they don't take issue with the drop in income for last year.

 

On the other hand, I have been also leaning towards waiting until they contact me about it and then closing the account/moving on to other lenders.  I'd like to stay with Discover, but not sure how I really feel about this situation.

Message 6 of 27
thornback
Senior Contributor

Re: Discover Is Asking For Signed Consent


@Aptus wrote:

@thornback wrote:

If your reported income is higher than whatever you've told Disco, there should be no issue. 

 

Now, whether or not you want to give them access is, of course, a personal choice.   I closed my card when they requested it from me (my card was 2 years old at the time of the request) because they were using Equifax as the intermediary with the IRS and this was right after the big Equifax breach -- I just could not bring myself to allow Equifax access to my tax transcripts... and my theory was that EQ would use this data to build upon their own income verification database.   I even asked Disco if there was another option, like linking directly to IRS or supplying paystubs and they said no.   It's been a year since I went through this so things may have changed - not sure if Equifax is still involved.


This is distressing as I work on commission so my income fluctuates a great deal year to year.  This year it was far lower than anticipated and I have been debating updating the income information on Discover's site, but didn't want to draw any unwanted attention and was leaning towards a 'wait and see' approach.

 

However, if it appears that it is more of a matter of "when" rather than "if", it may be better to update the income with the new tax filings for 2020 and hope that they don't take issue with the drop in income for last year.

 

On the other hand, I have been also leaning towards waiting until they contact me about it and then closing the account/moving on to other lenders.  I'd like to stay with Discover, but not sure how I really feel about this situation.


My advice would be to wait it out - it may be a year before they get around to you (or it could be tomorrow) and it's a great card- so may as well use it and collect your casback -- but i would recommend not carrying a balance you can't immediately pay off, if necessary.

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 11/2020: EX 780 ✦ EQ 771 ✦ TU 781
Current FICO 9s | 11/2020: EX 793 ✦ EQ 780 ✦ TU 778
2020 Goal Score | 800s


My AAoA: 3.8 years not incl. AU / 4 years incl. AU
My AoOA: 7.10 years not incl. AU / 9.10 years incl. AU
Inquiries: EX 0/6 | 1/12 ✦ EQ 1/6 | 2/12 ✦ TU 0/6 | 1/12
Report Status: Clean


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 7 of 27
Aptus
Regular Contributor

Re: Discover Is Asking For Signed Consent


@thornback wrote:

@Aptus wrote:

@thornback wrote:

If your reported income is higher than whatever you've told Disco, there should be no issue. 

 

Now, whether or not you want to give them access is, of course, a personal choice.   I closed my card when they requested it from me (my card was 2 years old at the time of the request) because they were using Equifax as the intermediary with the IRS and this was right after the big Equifax breach -- I just could not bring myself to allow Equifax access to my tax transcripts... and my theory was that EQ would use this data to build upon their own income verification database.   I even asked Disco if there was another option, like linking directly to IRS or supplying paystubs and they said no.   It's been a year since I went through this so things may have changed - not sure if Equifax is still involved.


This is distressing as I work on commission so my income fluctuates a great deal year to year.  This year it was far lower than anticipated and I have been debating updating the income information on Discover's site, but didn't want to draw any unwanted attention and was leaning towards a 'wait and see' approach.

 

However, if it appears that it is more of a matter of "when" rather than "if", it may be better to update the income with the new tax filings for 2020 and hope that they don't take issue with the drop in income for last year.

 

On the other hand, I have been also leaning towards waiting until they contact me about it and then closing the account/moving on to other lenders.  I'd like to stay with Discover, but not sure how I really feel about this situation.


My advice would be to wait it out - it may be a year before they get around to you (or it could be tomorrow) and it's a great card- so may as well use it and collect your casback -- but i would recommend not carrying a balance you can't immediately pay off, if necessary.


Yeah, I agree. I'm leaning towards that being my current plan. I'll continue to enjoy the card and strengthen my profile so that if/when the time comes, I can make the decision on how to proceed and go from there. Hopefully it all works out because outside of this, I really like Discover as a company overall.

 

Fortunately, I don't tend to carry balances on my cards and PIF every month so if it does happen, I'll be able to easily close the card out without any issue.

Message 8 of 27
thornback
Senior Contributor

Re: Discover Is Asking For Signed Consent


@Aptus wrote:
Yeah, I agree. I'm leaning towards that being my current plan. I'll continue to enjoy the card and strengthen my profile so that if/when the time comes, I can make the decision on how to proceed and go from there. Hopefully it all works out because outside of this, I really like Discover as a company overall.

It really is a shame. I went back and forth over the decision of whether or not to close but when they refused to consider any other form of verification that kinda sealed the deal for me. I really liked them too.

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 11/2020: EX 780 ✦ EQ 771 ✦ TU 781
Current FICO 9s | 11/2020: EX 793 ✦ EQ 780 ✦ TU 778
2020 Goal Score | 800s


My AAoA: 3.8 years not incl. AU / 4 years incl. AU
My AoOA: 7.10 years not incl. AU / 9.10 years incl. AU
Inquiries: EX 0/6 | 1/12 ✦ EQ 1/6 | 2/12 ✦ TU 0/6 | 1/12
Report Status: Clean


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 9 of 27
LaHossBoss
Senior Contributor

Re: Discover Is Asking For Signed Consent


@Aptus wrote:

@thornback wrote:

If your reported income is higher than whatever you've told Disco, there should be no issue. 

 

Now, whether or not you want to give them access is, of course, a personal choice.   I closed my card when they requested it from me (my card was 2 years old at the time of the request) because they were using Equifax as the intermediary with the IRS and this was right after the big Equifax breach -- I just could not bring myself to allow Equifax access to my tax transcripts... and my theory was that EQ would use this data to build upon their own income verification database.   I even asked Disco if there was another option, like linking directly to IRS or supplying paystubs and they said no.   It's been a year since I went through this so things may have changed - not sure if Equifax is still involved.


This is distressing as I work on commission so my income fluctuates a great deal year to year.  This year it was far lower than anticipated and I have been debating updating the income information on Discover's site, but didn't want to draw any unwanted attention and was leaning towards a 'wait and see' approach.

 

However, if it appears that it is more of a matter of "when" rather than "if", it may be better to update the income with the new tax filings for 2020 and hope that they don't take issue with the drop in income for last year.

 

On the other hand, I have been also leaning towards waiting until they contact me about it and then closing the account/moving on to other lenders.  I'd like to stay with Discover, but not sure how I really feel about this situation.


You bring up a topic regarding the 4506T that I was pondering - what about income updates in the future after passing a 4506T? Is this a one-time deal unless there is cause for IV?

 

Say you update your income, generally one submits what they make currently. Will this trigger a 4506T every time or again at some point if it changes, say 10% in either direction (or some other decided %)?

 

And since they use the previous year or 2 prior tax filings, that seems to be silly IMO. No one generally updates their income with old data. That is why I feel this process is flawed and many accounts are/will be shut down unfairly.

 

Why would anyone use 1 or 2 year old data if it has changed significantly enough recently (say in less than the 1 - 2 years worth of tax filings)?

 

Aside from HHI (which is supposedly allowed, but really only if it is provable via joint tax filings, even though that is not what the app states), what about those that are not required to file tax returns? Are they just shut down since there is not any tax filings to verify?

 

So many questions with no answers, I know. This is just so frustrating.

 

Bare minimum, they need to vhange the disclosure on the app if they are 100% going to be using a 4506T. They should state HHI only applies if it can be proven via joint tax return and that since a 4506T request will be made at some point, you need to use income data from the previous 2 years tax filings, and lastly if you don't file taxes (at least the previous 2 years) to not bother applying because you will be shut down.




Starting Score: 2•20 | EQ 550 | TU 498 | EX 505
Current Score: 7•21 | EQ [F8 645] [F9 651] [EQ5 684] [VS3 630] | TU [F8 717] [F9 692] [TU4 723] [VS3 643] | EX [F8 714] [F9 675] [EX2 681] [VS3 674]
Goal Score: 670 [X] TU [X] EX

Take the myFICO Fitness Challenge

SO Starting Score: 2•20 | EQ 502 | TU 484 | EX 521
SO Current Score: 7•21 | EQ [F8 670] [F9 622] [EQ5 706] [VS3 639] | TU [F8 676] [F9 673] [TU4 652] [VS3 620] [VS4 598] | EX [F8 707] [F9 711] [EX2 680] [VS3 656]
Goal Score: 670 [X] TU [X] EX




Message 10 of 27
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