Deceptive Telemarketing Practices Cost Discover Over $200 Million
Yet another credit card issuer will have to pay back millions of dollars to customers for misleading telemarketing practices.
Today, the Consumer Financial Protection Bureau and the FDIC announced that Discover will refund $200 million to their credit card customers for pressuring cardholders into buying expensive payment protection and credit monitoring services. In addition, Discover will pay a $14 million fine.
Refunds will be issued to over 3 ½ million Discover customers customers who were charged for at least one of the products from December 1, 2007 to August 31, 2011.
The regulatory agencies reported the company’s telemarketers misled customers about the programs, enrolled customers without their consent and led customers to believe the products were free. In some instances, the scripts suggested the cardholders would not be charged until after they had reviewed written materials, but the materials arrived after Discover had already charged the customers for the products.
In July, Capital One agreed to pay up to $150 million to two million consumers as a result of the bank’s telemarketers deceptively pushing these same credit monitoring and payment protection services. In addition, Capital One agreed to pay fines of $25 million to the CFPB and $35 million to the Office of the Comptroller of the Currency.