Discover Financial Services (DFS: Quote) said Friday its subsidiary, Discover Bank, has agreed in principle with the Federal Deposit Insurance Corp. and Consumer Financial Protection Bureau to settle issues related to the marketing of certain credit protection products sold by telephone.
The agreement requires the company to provide refunds of about $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.
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.
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by RTT Staff Writer
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