Discover Financial Services

In December 2020 the CFPB issued another consent order against Discover Bank and affiliates after finding that Discover violated its 2015 Bureau order and committed additional unlawful student-loan servicing practices. Discover misrepresented minimum payments, interest paid and other material servicing information, failed to provide all required redress, withdrew payments from more than 17,000 consumers without valid authorization, and cancelled or failed to withdraw payments for more than 14,000 consumers without notification. The CFPB also found deceptive representations affecting more than 100,000 consumers concerning minimum payments and more than 8,000 consumers concerning interest paid. Discover was required to pay at least $10 million in consumer redress and a $25 million civil penalty. Primary source: https://www.consumerfinance.gov/archive/newsroom/consumer-financial-protection-bureau-settles-with-student-loan-servicers-discover-bank-the-student-loan-corporation-and-discover-products-inc-for-violating-a-bureau-consent-order-and-other-unlawful-practices/

The Consumer Financial Protection Bureau ordered Discover Bank and affiliates to pay $18.5 million in 2015 over illegal private student-loan servicing practices. The CFPB found that Discover overstated minimum amounts due on billing statements, misrepresented tax information borrowers needed to obtain federal income-tax benefits, and engaged in illegal debt-collection practices. The order required approximately $16 million in consumer refunds and a $2.5 million civil penalty, along with corrections to servicing and collection practices. Primary source: https://www.consumerfinance.gov/enforcement/actions/discover-bank-student-loan-corporation-discover-products/

CFPB found Discover violated an earlier consent order and engaged in unfair and deceptive student-loan servicing practices, including unauthorized withdrawals and misrepresentations about minimum payments and interest. The 2020 order required at least $10 million in consumer redress and a $25 million civil penalty. Source: https://www.consumerfinance.gov/enforcement/actions/discover-bank-the-student-loan-corporation-and-discover-products-inc/

CFPB and FDIC found Discover used deceptive telemarketing and sales tactics to mislead consumers into paying for credit-card add-on products. Discover was ordered to refund about $200 million to more than 3.5 million consumers and pay a $14 million civil penalty. Source: https://www.consumerfinance.gov/archive/newsroom/discover-consent-order/