Kudos to Obama’s newly formed Consumer Financial Protection Bureau for cracking down on this. In short, Discover’s telemarketers offered customers unnecessary “add-on services” which were implied to be free, and then charged customers’ accounts for said services. In July, Capital One was forced to pay $210 million over the same practice. The Los Angeles Times reports:
More than 3.5 million Discover credit card customers will share $200 million in refunds in the wake of a federal investigation that determined the bank tricked people into signing up for payment protection plans and other add-on services. Regulators said scripts for Discover’s telemarketers “contained misleading language likely to deceive consumers about whether they were actually purchasing a product.”
Consumer advocates said the enforcement actions show that the new consumer bureau is on the job. “Banks have been doing this for years, but we never had a regulator who protected consumers before,” said Ed Mierzwinski, director of the consumer program for the U.S. Public Interest Research Group.