Feds Crack Down on Discover Bank for Allegedly Deceptive Sales

Roughly 3.5 million consumers will get back $200 million in restitution from ""Discover Bank"":https://www.discover.com/index.html after federal agencies came down on the financial services institution on Monday for allegedly deceptive sales strategies.

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The ""FDIC"":http://www.fdic.gov/ and ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/ unveiled a public enforcement action to conclude their joint investigation that started last year.

According to a release, Discover Bank will also fork over $14 million in civil penalties for masking financial products with fees as freebies, misleading consumers about charges, even processing orders without their consent in cases.

The agencies also charged that Discover Bank held back when it came to information about eligibility

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requirements, keeping what it took to receive protection benefits under wraps.

Many consumers felt misled after trying to stop credit-card payments under duress ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô something Discover Bank allegedly billed as one of the many benefits to its protection services.

Consumers who receive compensation for these claims will receive at least 90 days off their paid fees. Some 2 million customers will receive their money back on fees paid to the bank.

A consent order handed down by the federal agencies requires Discover Bank to do away with misleading information in its telemarketing scripts, provide refunds without any further action against consumer credit, and submit to audits.

Discover Bank called the consent order an ""agreement in principle"" with the CFPB and FDIC in a statement on Friday.

""We have worked hard to earn the loyalty of our cardmembers, and we are committed to marketing our products responsibly,"" ""David Nelms"":http://www.discoverfinancial.com/our-company/our-leaders/executive-committee.html, chairman and CEO of Discover, said in a statement. ""As always, we will continue to strive to deliver the highest standards of customer service and satisfaction.""

CFPB and FDIC officials remained tight-lipped in a teleconference call about the decision on Monday, declining to comment about the case.

""As we find violations in the law, we'll pursue them,"" Mark Pearce, director of the FDIC's division of depositor and consumer protection, told reporters.