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.
LowCards.com simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card. The LowCards.com Complete Credit Card Index is the most objective and comprehensive resource on the Internet which allows consumers to compare rates for over 1,000 credit cards offered in this country. Created by Hampton & Associates, the company has been analyzing the credit card industry and supplying objective websites on various consumer expenses for twelve years.
It definitely sounds like they deserved it. There’s nothing worse than ‘automatic enrollment’ for customers when the product hasn’t even been explained. Hopefully they’ll tone it down going forward, but maybe the made much more that $200 million and will continue on.
Not only were false charges attached to statements, the telemarketing company selling the Discover Card protection kept pushing the “benefits” beyond what the package actually covered. The persistent telemarketer pushed to the point of questioning the security of your job, touting the fact that in case of a cardholder loosing their job, the protection plan would pay off the balance. I purached the protection assuming what the person selling the produce was telling me was true, coming from Discover Bank.
When the 2008 resession hit and I lost my job, Discover Bank did not pay off the balance but wrote off the debt for a tax write off, then sold the debt to a collection agency and the real nightmare started. A collection attorney plays the game in a small claims court, knowing the judge will make a hasty decision based on only what the collections attorney said, never once reviewing the complete history leading up to the trail and ruling.
There is more to Discover Banks overcharging for the service, but never honored what the sales person was pushing over the phone.
Discover Bank was making huge profits from the profits they sold as part of their credit card, but when the economy crashed, their heads went into the sands and hid behind attorneys to cover the wrongs that were covered.
Shame on Discover Bank!!