ST. PAUL (WCCO) – Putting purchases onto plastic is a way of life in our consumer-driven society. And of all the credit cards issued, one-in-four Americans has the card “that pays to Discover.” The Delaware-based credit card company reported a 2009 net income of $1.3 billion.
But according to Minnesota’s Attorney General, “This is a case of a credit card company playing ‘gotcha’ instead of playing fair.”
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Attorney General Lori Swanson is accusing Discover of using “deceptive and fraudulent” telemarketing tactics to enroll customers into programs they don’t want and never authorized. The so-called, “add on” products include payment protection plans, identity theft protection, lost or stolen wallet insurance and credit score monitoring.
Cost of those plans can range from anywhere between $12.99 to $50 or more per month. One Minnesota customer was out more than $900 before he realized he was enrolled in a service he never agreed to.
“People expect their credit card companies to protect them from fraudulent charges, not to be making fraudulent charges,” Swanson said.
Jill Amundson has been a Discover Card member since 1990. She calls it her, “go-to card.” But Amundson was charged $180 for Discover’s payment protection plan. The Attorney General’s office has secured company telephone recordings, which clearly show Amundson never agreed to the telemarketer’s pitch call.
On the recording you can hear Amundson ask, “You don’t automatically enroll me, do you?” The telemarketer’s reply is clear, saying, “I just want you to review some of the benefits.”
Never in the several-minute recording do you hear the Minneapolis woman agreeing to the service.
Other customers complain of “speed talking” telemarketers, who are pitching Discover Card offers that they say are completely unintelligible and misleading.
Brad Sparish was stung, too. A recording of his conversation with a Discover telemarketer clearly shows that he never agreed to the plan. Instead, his monthly credit card statements carried a charge for the service for three months before he noticed the fraudulent transaction.
“And I look at my bills pretty religiously, so it was caught quickly,” Sparish said. “But it’s frustrating you have to do that.”
The state’s lawsuit against Discover seeks an immediate injunction to stop the telemarketing practice. It also seeks civil penalties and restitution for all defrauded cardholders.
In a written response, Discover spokesperson Leslie Sutton said the company won’t respond to the specifics of the lawsuit.
“It’s not in Discover’s interest to sell a product that doesn’t enhance our relationship with our card members,” Sutton added.
WCCO-TV’s Bill Hudson Reports