Discover Reached an Agreement With the FDIC and CFPB to Settle An Issue Surrounding its Marketing of Credit Protection Products
Discover Financial Services (NYSE: DFS) today announced that its subsidiary, Discover Bank, has reached an agreement in principle with the Federal Deposit Insurance Corporation (FDIC) and Consumer Financial Protection Bureau (CFPB) to resolve previously disclosed matters related to the marketing of certain credit protection products sold by telephone. The agreement is subject to final approval by both regulatory agencies.
“We have worked hard to earn the loyalty of our cardmembers, and we are committed to marketing our products responsibly,” said David Nelms, chairman and chief executive officer of Discover. “As always, we will continue to strive to deliver the highest standards of customer service and satisfaction.”
The agreement requires the company to provide refunds of approximately $200 million to cardholders who purchased the products by telephone from December 2007 to August 2011 and calls for certain enhancements to the company's marketing practices. The company will pay an additional $14 million in civil monetary penalties to be split between the FDIC and the CFPB.
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