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Discover Financial Services, which is facing a government probe over its marketing of credit card insurance-like products, believes its relatively new practices will appease regulators, a top executive said on Thursday.
February 16 -
Banks have faced onslaughts of litigation for several years over their credit card payment protection plans. But so far legal efforts to challenge or change the business have ended in dismissals or relatively small settlements.
February 6 -
Banks have been accused of ripping off consumers for insurance-like credit card products. Now critics who say the payment protection plans are a racket could get a boost from federal regulators.
February 6
The state of Hawaii has sued seven major credit card issuers over the marketing of credit card insurance-like products, known as
The lawsuits, filed last Thursday, allege that the companies have illegally charged unknowing customers for the products and have failed to provide adequate plan benefits.
Bank of America (BAC), Barclays (BCS), Capital One (COF), JPMorgan Chase (JPM), Citigroup (NYSE:C), Discover Financial Services (DFS) and HSBC (HBC) are all named as defendants in separate filings.
Hawaii Attorney General David Louie filed the lawsuits along with a local attorney and two plaintiffs' firms, Golomb & Honik of Philadelphia and Baron & Budd of Dallas.
"The defendants commit unfair and deceptive business practices and violate statutory law by charging consumers for ancillary products, including payment protection plans, who either did not want them or were not entitled to benefits from them, and by the unfair and deceptive manner in which defendants offer and administer claims for benefits by consumers," according to the Hawaiian lawsuits.
Capital One, HSBC, Barclays, Citigroup and Discover declined to comment. Bank of America and JPMorgan Chase did not respond to requests for comment.
Hawaii is asking for an injunction to halt any illegal practices and is seeking restitution for affected customers, according to the lawsuits.
The suits are similar to earlier complaints by attorneys general in Minnesota and West Virginia. Their lawsuits alleged that card issuers were illegally marketing their credit card payment protection plans.
Discover, the only defendant in the Minnesota suit,
The West Virginia AG sued nine banks, including Discover, in August 2011, on similar allegations. Missouri's AG submitted a request for information to Discover that same month, the company previously disclosed in regulatory filings.
Several banks have also
Discover is also
