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FDIC to hold Discover accountable for allegedly deceptive marketing

The FDIC has notified Discover Financial Services that it will begin enforcement action following Discover’s allegedly deceptive marketing towards its consumers.

Discover Financial is accused of misleading consumers to purchase fee-based products and programs, including identity theft protection plans, lost or stolen wallet plans and a credit score tracker, according to FoxBusiness.com.

The federal regulators are not the only ones going after Discover for its marketing schemes.

Private attorneys and consumers, along with many state attorneys general, have filed suits against the company for allegedly deceptive marketing to thousands of consumers, especially elderly consumers, and enrolling them in payment protection plans that cost hundreds of dollars per year.

"People expect their credit card company to help them avoid fraudulent charges, not make them," Minnesota Attorney General Lori Swanson said, according to FoxBusiness.com.

Swanson took action after receiving complaints that Discover Bank used misleading telemarketing tactics to charge credit card customers for expensive optional financial products. Customers complained that they thought they were receiving courtesy calls but would be charged for programs that they did not consent to and were then refused refunds.

Jon Drummond, Discover Bank’s spokesman, said that the company has changed its marketing tactics even before federal regulators became involved and is disappointed that the FDIC will pursue the issue.

"Since well before the FDIC's review began, Discover Bank has made changes to both its fee-based products and programs, and Discover Bank believes its current practices substantially address the FDIC's concerns,” the bank wrote in a filing with the Securities and Exchange Commission, according
to FoxBusiness.com.

Details of the FDIC’s enforcement action have not yet been released.

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