The agreement between Discover, the Federal Deposit Insurance Corp. and the Consumer Financial Protection Bureau stipulates that Discover will be required to refund money to customers who fell prey to the abusive practices, particularly the marketing of credit protection services sold by phone, between December 2007 and August 2011, DelawareOnline.com reports.
“We have worked hard to earn the loyalty of our card members, and we are committed to marketing our products responsibly,” David Nelms, the chairman and CEO of Discover, said, according to DelawareOnline.com. “As always, we will continue to strive to deliver the highest standards of customer service and satisfaction.”
The settlement is the second reached by the CFPB regarding credit card add-on products that are designed to assist consumers in managing debts if a catastrophic event or job loss occurs. The CFPB reached a $210 million settlement with Capital One in July over similar allegations.
Minnesota Attorney General Lori Swanson filed the suit against Discover in 2010, alleging that the company’s telemarketers failed to notify consumers when they were purchasing optional, fee-based services.
Discover said in a May disclosure that it has “made changes to both its products and the program, and the company believes its current business practices substantially address the regulators’ concerns,” DelawareOnline.com reports.