Attorney General Lori Swanson has settled a lawsuit against Discover Bank. The settlement provides compensation for customers who believe they were charged for the optional financial products “Payment Protection,” “Identity Theft Protection,” “Wallet Protection,” and “Credit Score Tracker” without their knowing authorization. The settlement also includes Discover’s commitment to change it’s procedures to ensure that all future enrollments in those products include the customer’s clear authorization.
The lawsuit alleged that Discover charged some people’s credit cards for enrollment in “Payment Protection,” “Identity Theft Protection,” “Wallet Protection,” and “Credit Score Tracker,” even though they did not knowingly agree to purchase anything and were not aware of the charges. Discover did not admit liability as part of the settlement.
Under the settlement, Discover paid the State of Minnesota $2 million to cover costs of investigation, civil monetary penalties, and for the benefit of Discover cardholders who believe they were harmed. The Attorney General’s Office is making all $2 million of the settlement funds, less any administrative costs, available to Minnesota cardholders who file a claim.
In addition, Discover has agreed to procedures so that, going forward, consumers will not be enrolled in the four optional products without their knowing authorization, including:
- If a Minnesota customer questions his or her enrollment in a product and asks to hear a recording of the enrollment call, Discover will either allow the customer to hear the recording or cancel the enrollment and refund all of the customer’s fees for that product.
- On a periodic basis, at the Attorney General’s request, Discover will provide copies of enrollment recordings to the Attorney General’s Office so it can ensure that Discover is complying with the settlement.