Discover Financial Services is being taken to task for putting weirdo recurring charges on the billing statements of its customers.
People who had Discover cards found strange recurring charges for various “protection plans” with almost no additional description. Though it was a small fee charged per customer, the so-called services that Discover was putting on statements generated some $300 million for the company in a single year.
If you called up to complain, Discover would remove the charge from your last two billing statements. But that was it.
The attorney general of Minnesota sued Discover back in Dec. 2010 because they weren’t telling people that these were optional charges. Several other states filed their own suits, and then the company agreed to settle eight of those lawsuits a few months ago.
Now federal regulators are getting ready for an enforcement action against Discover. The company has since agreed not to do this shady billing going forward.
I don’t know what it is about the banking section. I could spend all day telling you about ethical blind spots in the industry. What happened to the moral compass of banking in America? Who at Discover thought it was a good idea to rip customers and undermine their trust?