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Prepared Remarks by Richard Cordray on the Press Call on FDIC and CFPB Joint Enforcement Action

Today I am pleased to announce that the Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau are putting $200 million back into the pockets of more than 3.5 million American consumers who were deceived and misled into buying Discover’s credit card add-on products.  The Bureau was created, in part, to put an end to unfair, deceptive, and abusive practices in the consumer financial markets.  Today’s action showcases how a solid partnership between the CFPB and FDIC can bring about real results for consumers.

The FDIC began this investigation and then worked closely with the Bureau to bring us to where we are today.  Based on our joint investigation, we have determined that Discover used deceptive tactics to sell four credit card add-on products – payment protection, credit score tracking, identity theft protection, and wallet protection.  Payment protection would allow consumers to put their payments on hold for up to two years in certain circumstances, while the other products were to monitor, protect, or track a consumer’s credit.

Discover used deceptive telemarketing techniques when it sold consumers all four of these add-on products.  Discover’s telemarketing scripts contained many misrepresentations, implying that these products were free of charge and simply “added benefits” that came with having a Discover card.  As a result, many consumers did not realize that their accounts were actually charged for these products.

Furthermore, investigators from the Consumer Bureau and the FDIC listened to numerous recorded sales calls where Discover’s telemarketers spoke unusually fast when explaining the cost and product terms, and even processed purchases without the consent of consumers.  In certain cases, Discover’s telemarketing scripts indicated to consumers that they would receive a letter with more information before being required to pay for a product.  However, Discover initiated the consumer’s purchase of the product before even sending this material out.

This is the second action that the Bureau has taken, in coordination with a fellow regulator, to address the deceptive marketing of credit card add-on products.  We have also published a compliance bulletin to put other institutions more specifically on notice that such tactics are illegal and should be halted.  We continue to expect that more such actions will follow.  In the meantime, we are signaling as clearly as we can that other financial institutions should review their marketing practices to ensure that they are not deceiving or misleading consumers into purchasing financial products or services.

The details of today’s action are memorialized in a consent order that is available on our website for public review.  We also want Discover card customers to know how to get their refunds.  Any eligible consumer who still has a Discover account will receive a credit to the account.  Otherwise, the consumer will receive a check in the mail.

At the CFPB, we are dedicated to fair and evenhanded oversight of the financial markets, but it is also our responsibility to root out practices that deceive or mislead consumers.  People deserve to be treated fairly by their financial institutions.  We will continue to work toward that goal with great determination, and I thank the FDIC for partnering with us to achieve that today.

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit