WASHINGTON (9/24/12)—Discover Financial Services made an announcement Friday that it has an agreement in principle with the Federal Deposit Insurance Corp. (FDIC) and the Consumer Financial Protection Bureau (CFPB) under which its subsidiary Discover Bank will refund about $200 million to its cardholders who purchased card protection products by telephone from December 2007 to August 2011.
The agreement also calls on Discover to pay another $14 million in civil monetary penalties to be split between the FDIC and the CFPB, and to enhance the company's marketing practices. Early this year, Discover Financial said it was notified by the two regulatory agencies of problems with the way it was marketing its fee-based card protection products—things like balance protection.
The Discover agreement follows by just a couple months a separate agreement between Capital One Financial and regulators, which revolved around that company's call center allegedly leading customers to pay too much for credit card products. Capitol One also agreed to pay about $200 million in refunds.