Credit Card News
Advertising Disclosure
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.
Credit Card Applications » News » Other » FDIC Probe into Discover’s Sales Practices

FDIC Probe into Discover’s Sales Practices

By
Add to Favorites:
FDIC Probe into Discover’s Sales Practices

The price per share of Discover Financial stock dipped upon the announcement made by the Federal Deposit Insurance Corp. that they will be conducting an investigation of the card issuer’s selling practices with regard to some of its products. This probe comes on the heels of several class action lawsuits which were filed in numerous U.S. District Courts across the country.

An examination will be made of how Discover marketed the following “protection” services:

  • Identity theft protection, which surveys a cardholder’s credit report in search of activity such as unauthorized address changes, unusual new accounts and other potentially fraudulent information.
  • Payment protection, a service that provides cardholders with the opportunity to put payments on hold for as long as two years should they suffer specific hardships such as hospitalization, disability, job layoff, death of a spouse or a state disaster. One-month payment holds are allowed for more positive events such as the birth of a child, adoption, marriage, retirement, new job or graduation.
  • Wallet protection, wherein customers can register their credit cards and, should their wallet be stolen, they can opt to be wired up to $1,000 emergency cash and their cards will be cancelled automatically.
  • Credit score tracker, a service that avails customers of their credit reports and scores online, as well as alerting them if their scores ever changes.

“An important point is that it’s not the actual product that’s in question, it’s the way that it was sold,” said Sanjay Sakhrani,l and analyst from Keefe, Bruyette & Woods to washingtonpost.com.

Discover altered the sales practices that are currently in contention following the first lawsuit that surfaced in California last year.

There have been eight pending class-action lawsuits filed against Discover over the way their protection products were marketed. In June, the credit card company revealed that they had come to an initial global settlement. The deal is still awaiting approval from a judge and the details of which have not yet been released.

Roughly 3% of Discover’s totally revenue comes from their credit protection business.

Add to Favorites:

Related News:

Citi and BRP Ink a Deal

By Dar Dowling, Posted: January 24, 2017

Citi Retail Services has signed a long-term financing services deal with BRP, a company specializing in the designing and manufacturing of power sports vehicles. Continue reading
Citi Increases the Number of ATMS

By Dar Dowling, Posted: January 23, 2017

Citibank has just inked a new deal with Cardtronics, a ATM owner/operator, which will just about double the number of free ATMs in their U.S. network. Continue reading
Fifth Third Bancorp Upgrades App

By Dar Dowling, Posted: January 20, 2017

Fifth Third Bancorp has upped the ante when it comes to their mobile app, in terms of how many ways users can pay for merchandise – now letting them make payments with all of the available payment platforms. Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Unlimited 1.5x rewards on every purchase, every day. For every $1 you spend, you earn 1.5x Miles.
For Excellent, Good Credit
You could turn $200 into $400 with Cashback Match™. We’ll automatically match all the cash back you earn at the end of your first year. New cardmembers only.
For Excellent, Good Credit
Guaranteed $500 Unsecured Credit Limit
For Bad Credit