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UGLY: Discover Card, Citibank, Capital One (& Others?) Versions of the American Express Financial Review!

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Rene’s Points For Better Travel, a division of Chatterbox Entertainment, Inc. has partnered with CardRatings for our coverage of credit card products. Rene’s Points For Better Travel and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. As an Amazon Associate I earn from qualifying purchases.


I have been in the points game for a very long time. I have had just about every card ever produced by all the major banks — and am now even working on round after round of cards you may never have ever considered.

The point (no pun intended) is I still, now years later, each year go for many many* cards to harvest either the new card bonus offer or because I can maximize whatever “X” monthly points spending offer the card provides (*if you are wanting Chase cards you will want to avoid this for 2 years to be approved for most of their travel cards).

Early on in my points life, I did a few things that triggered the Amex Financial Review (AFR). For those who are not aware what this process is, you know you are impacted when you log-in to your Amex accounts and find they are all frozen (or you go to use any of your cards and they all decline at the point of purchase is also a way you find out).

There are a number of “flavors” if you will of the AFR. The benign one just has a few questions and possibly income verification and you are on your way. The nasty one requires you give full access to YEARS of your tax returns to the card company (i.e. not you send them tax returns but you give them access to pull them from the IRS).

You can choose to comply or not. If not, most times, you are done with Amex for a very, very long time as the AFR will follow you whenever you try for a new card (there are workarounds but I only share those at locations like the Chicago Seminars).

With all of the above out of the way, it is news to me that other banks have instituted similar type AFRs – mostly when you apply for cards. Notice what a reader, we will call him BOB, told me the other day when he applied for a Discover card:

Discover Financial Services requires your consent to receive tax information from the Internal Revenue Service (IRS) to verify information on your account. Within 5 days, please click the ‘Review Documents’ link below to provide consent via IRS Form 4506-T. Until this verification is complete, a temporary hold has been placed on your Discover card account. Your account will be closed in 14 days if you are unable to provide the requested consent.

Please follow the steps below: Upon clicking the link, you will be prompted to enter an Access Code. The Access Code is the 5-digit zip code on file with your Discover card account, followed by the last 4 digits of your Social Security Number (SSN). If you use an Employer Identification number (EIN) for your Discover card account, the Access Code is the entity’s 5-digit zip code on file with your Discover card account, followed by the last 4 digits of the EIN. To complete the form, you must provide your e-signature. If applicable, complete line item 4. Please allow 5-7 days for Discover to receive and process the IRS documentation. Discover will contact you in writing to advise of completion of review of your account.

For questions or if any information on your 4506-T is incorrect, please contact Discover Customer Protection Services directly at 1-800-203-4969, or call the phone number on the back of your card. The team is available Monday through Friday, from 8:00AM-9:00PM Eastern Time, and Saturday 8:00AM-4:30PM Eastern Time.” – (BOLD MINE)

Ugh. Not fun. Not only that — but notice all of BOB’s other Discover cards were also frozen until he completed the forms Discover required i.e. giving them full access to years of his IRS records. Oh, and then it was up to them what happens next.

For a credit card?

Really?

Sigh….

It was shocking to me to find there is an over six month old REDDIT thread on this very Discover AFR and that this is not as new as it was to me. Also, other points friends of mine have said they once had Citibank do a similar type AFR request when applying for a card, and Capital One just recently as well.

Are there workarounds if Discover or other bank pulls this on you? I have no idea — but would love data points if you have experienced this with other banks other than Amex. Did you play along or tell them to go pound sand? If the latter were you able to get your remaining points out and has it impacted your ability to get other cards from the bank down the road i.e. did it follow you for years as a mark on your account? I would love to know.

Bottom line for those of us going for large numbers of cards each year: be alert that AFR type events could be triggered with a new card app even if you have been with the bank for a very long time. Should you be concerned if you are only going for / applying for say 5 to 10 new cards per year? Doubtful and especially so if your new card requests are spread out over a number of banks.

Even with airline and hotel programs suffering devaluations cuts and “enhancements” year after year there are still great points values to be had. For me, it is still both fun and worth it to play the game and travel the world at 10-20 percent of retail and I am willing to face whatever new (or old) roadblocks that may come along to accomplish that goal. – René

 

Rene’s Points For Better Travel, a division of Chatterbox Entertainment, Inc. has partnered with CardRatings for our coverage of credit card products. Rene’s Points For Better Travel and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. As an Amazon Associate I earn from qualifying purchases.


Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

René de Lambert is a contributing writer and the founder of RenesPoints. He is an avid Delta and SkyTeam flyer who has held Delta’s top Diamond Medallion status for many years and flown millions of miles.

10 Comments

  1. I’d almost enjoy Discover coming at me. I’d tell them NO to the taxes aspect, and that if they closed any card I would start to move my $200K+ CD funds elsewhere as they mature.

    I guess then we’d see how well different parts of the bank communicate / work together.

    Regarding Amex I would also tell them NO also, but would miss the Aspire card.

    • Scott Stoneham Reply

      I experienced this just yesterday. Discover has immediately gone from a company that I advocated for, valued and enjoyed being a customer of to a company that I despise and will never do business with again. I was a customer for about three years and have never paid late and have never paid even close to just the minimum payment. My discover card was my primary card and the only reason is wasn’t my only card was because the limit wasn’t adequate. My card was declined at a higher end retailer, I checked the app, it was down, I called customer service , the number was busy. So I used another card. I called when I got home as was told I needed to sign a 4506T in order to keep my account open. I argued, asked why they would treat and good customer like this, question my integrity and honesty invade my privacy for a credit card that’s never been paid late and that they had just 30 days prior increased the credit line of. I received no reasonable answer. So I called the executive integrity line with discover and received the same responses in a more polite and polished manner. I don’t need a discover card, I was a fan and a good customer, but this is ridiculous and unbelievably invasive and inappropriate for a credit card Company to request tax transcripts on a 10k revolving credit line that’s been paid like clockwork and regularly paid off and charged back up (very profitable for them). I’ve paid off of my card and now I’m determined to tell my story as many times as it takes to get an apology and a real explanation

  2. HuntingtonGuy Reply

    No real complaints about a business (Amex, Chase et al) doing their due diligence to protect their resources, but consenting to allow them…anyone access to your IRS file is just nuts IMO.
    Sure, they’ve already got our financial and personal data but submitting to a review of our gubmint records is an overreach, potentially one that could be easily abused.
    I’ve been asked, twice I think, to reverify financial information by Amex but I’d have to close the door on blessing access to my IRS files. It is simply not necessary for them to accomplish what they claim they seek and of course, it’s NUNYA.

  3. But what does giving them access prove anyhow? You may have millions in assets but not a huge income. Or a huge income but even bigger debt, perhaps to the local bookie. Or you may have a huge income but still be a deadbeat. Seems to me a credit score and maybe some asset verification means a lot more than tax returns.

  4. Discover just hit me up for the financial review and asked for access to taxes two days ago! I’m playing along because I need the card.

  5. Caressa N Cleveland Reply

    This Just Happened 2 My Husband & I 2 Weeks Ago. We Signed The Tax Form Bcuz It Is A Secured Card & They Had Just Taken 2 Payments From Our Checking Account That Basically Paid More Than The Balance Owed & Like Millions Of Others We Have Been Adversely Affected By The CoVid 19 Pandemic & Were Hoping That Either Our Ability 2 Use Our Card Or A Release Of Our Security Deposit Would Happen More Quickly But As Of 2wks Now We Have Yet 2 Hear Anything!!?

  6. Molly Marzano Reply

    This happened to me this week as well, and I have a SECURED CARD that only had a $500 limit. It’s freaking ridiculous. I had just paid my balance off and thatz the card I use for groceries. I’m a single mom I don’t know what they expect me to do!

  7. A year later and this is happening to me with discover. Not with applying for a card but after making a somewhat large purchase. I am paying my card off via phone because I cant access it online and telling them to kick rocks.

  8. It’s ridiculous, opened a secured card to borrow against my own money and they want to verify my income? When I inquired how long I would be prevented from having access to my own money they stated there is no time frame available and it’s reliant on the IRS to provide the information to them. BS. I inquired about terminating my card and was told it would take two billing cycles plus 7-10 business days… so a little more than 2 months to received my own money back from them though no purchases were made and my card was immediately placed on a freeze by them. Once this is sorted I will not be doing any further business with Discover, thought this was a great company, they proved wrong quite quickly.

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