Discover Financial Services (NYSE:DFS) shares edged higher today after it announced late Friday that its Discover Bank subsidiary has agreed with the Federal Deposit Insurance Corp and the Consumer Financial Protection Bureau to refund roughly $200 million to more than 3.5 million customers.
These customers are cardholders who purchased the products by telephone from December 2007 to August 2011, with the payment part of a settlement over alleged deceptive telemarketing and sales tactics.
The tactics were alleged to have been used by Discover to mislead customers into paying for various credit card protection add-on products.
As part of the agreement, which is still subject to final approval by both regulatory agencies, the company will also pay an additional $14 million in civil monetary penalties to be split between the FDIC and CFPB.
The deal also calls for "certain enhancements to the company's marketing practices," it said.
“We have worked hard to earn the loyalty of our cardmembers, and we are committed to marketing our products responsibly,” said chairman and CEO, David Nelms.
“As always, we will continue to strive to deliver the highest standards of customer service and satisfaction.”
Shares of the company were up 0.18 per cent at $38.69 Monday afternoon.