Discover Bank to refund customers $200 million and pay $14 million fine
A credit card reader is used to charge a credit card from a customer at Lorenzo’s Italian Market in Miami, Fla.
Discover Bank will refund customers $200 million and pay a $14 million fine for being deceptive in its telemarketing strategies.
The subsidiary of Discover Financial Services was reportedly using shady marketing tactics to sell customers payment protection plans and other add-ons, according to the Federal Deposit Insurance Corp. and the Consumer Financial Protection Bureau (CFPB).
The refunds will go to customers who bought Discover's credit protection products over the phone from December 2007 to August 2011. The average refund is about $57, CNN Money reported.
The agencies reported that Discover's telemarketers' scripts "contained misleading language likely to deceive consumers about whether they were actually purchasing a product," the Los Angeles Times reported.
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This is the third-ever settlement for the CFPB's, and comes after it wrapped up a settlement against Capital One in July, also for deceptive marketing tactics, according to CNN.
The Bureau was set up as part of 2010's financial overhaul law, the Associated Press reported. It was put in place to protect consumers from credit card fees and other financial threats.
“We have worked hard to earn the loyalty of our card members, and we are committed to marketing our products responsibly," CEO David Nelms said, the Associated Press reported.
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