Regulators allege that Discover encouraged enrolling card members into costly programs that it purported were free to use. Some of these services include credit monitoring and payment protection. Credit monitoring services come at a flat monthly rate, allowing customers to see their credit scores and check for suspicious activity. Payment protection is an add-on service that makes payments for cardholders should they become ill, disabled, or die. The program is controversial as it comes at a cost often exceeding 1% of the credit card user’s monthly balance.
Discover card holders should confirm whether or not they are scheduled for a refund. Card holders who were sold Payment Protection, Credit Score Tracker, Identify Theft Protection, or Wallet Protection services from Discover will be granted a partial refund worth at least 90 days’ of fees. Some 2 million customers will have the entirety of the fees paid refunded. All in all, this decision will affect 3 million Discover card holders who participated in the above programs from December 2007 to August 2011.
Regulators are increasingly cracking down on credit card companies that stray too far from their original purpose: to provide short-term, convenient credit. Leading into the financial crisis, banking companies turned toward new fee-generating services that have been a frequent target of consumer advocates. Across the nation, banks are curtailing their interest in add-on products – and several have announced plans to end their services entirely to avoid a crash course with government regulators.
Source:
creditcardflyers.com
