Discover Cardholders Misled by Optional Identity Theft Protection and Credit Monitoring Services
Holders of the Discover Card were recently deceived by telemarketers offering optional identity theft protection and credit monitoring services. As a result, the attorney general for the state of Minnesota filed a lawsuit accusing Discover Financial Services of deceptive practices.
The case which was filed with the Hennepin County District Court alleges that Discover Financial Services misled Discover Cardholders by using telemarketers to make calls that claimed to be courtesy calls and not a solicitation. As a result, Discover Cardholders were charged with subscriptions to identity theft protection services and credit monitoring services that claimed to track your credit score.
Other Discover Cardholders were coerced to acknowledge approval of statements that were vague or misleading so they had no knowledge that they were actually agreeing to be charged for the service subscription. An investigation was launched due to the number of complaints from consumers in the state of Minnesota.
As outlined in the lawsuit, telemarketers for Discover Financial Services which is the processing company for Discover Card called its customers and made it look like they were simply making sure that the consumer understood all of the benefits that accompanied their Discover Card. Following a vague explanation, Discover Card customers found that they had been enrolled in the identity theft protections services program and a charge was added to their Discover Card.
The lawsuit also defined customer complaints that the telemarketers who called them left out important words in their explanations or speed read the explanation to them making it difficult to follow and comprehend. The telemarketers for Discovery Financial Services also failed to make clear that the customer was buying something and placed more emphasis that a sale was not taking place, according to the lawsuit details.
The accusations were further solidified when the attorney general’s office obtained a recording of a telemarketer speaking to a customer. The telemarketer offered to send information on the identity theft protection service and then rushed through the disclosure and pricing information. When the customer asked if he was buying the identity theft protection service the telemarketer told him that all he was doing is mailing out the information. The next month the charge for the service appeared on the customer’s Discover Card bill.
As part of the investigation it was found that products such as the identity theft protection and credit monitoring service generated closed to an additional $300 million in revenue during the year 2009 which represented an 18 percent increase from 2008.
The identity theft protection and credit monitoring service is offered to Discover Cardholders for a monthly fee of $12.99. Another program under investigation was the payment protection plan which offers the customer the opportunity to defer payments in the event of hardship at the cost of $.89 on every $100 outstanding balance each month. The investigation for this program results from consumer complaints in the state of New Jersey where deceptive practices were used by telemarketers to enroll Discover Cardholders in the program. Other customers were never called but they were enrolled and the charge was added to their card.