Discover Bank to reimburse $200 million

Posted on Sep 24, 2012 in Business | 0 comments

U.S. regulators said Monday Discover bank had agreed to refund 3.5 million consumers $200 million and pay a fine to settle charges of deceptive marketing.

The Federal Deposit Insurance Corp. and the Consumer Financial Protection Bureau announced the settlement jointly. It includes a $14 million civil penalty and a mandate to reimburse customers.

The flawed marketing had to do with Discover’s behavior while selling “add-on products” to its credit service, including payment protection, credit score tracking, identity theft protection and wallet loss protection, the agencies said.

Regulators said sales of the add-on products “often used language implying that the products were additional free ‘benefits,’ rather than products for which a fee would be applied to their accounts.”

Consumers were deceived about the charges, about whether or not they had purchased the add-on services and “enrolled without their consent,” the agencies’ statement said.

Copyright 2012 by United Press International