The economic difficulties we’ve faced in California are apparently far from over. The state government continues to struggle, as do individuals. Some may find themselves in a situation where they have had to turn more regularly to their credit cards just to meet their needs. Forget about wants.

For some, this may be resulting in a stack of credit card debt that they now find impossible to climb and conquer. And if that isn’t stressful enough, many have found that credit card companies are wringing them for more by charging them for add-on products they never really wanted.

Discover Bank has just been added to the ranks of those card issuers that regulators have taken to task for deceptive practices that have resulted in card users being charged increasing monthly fees for payment protection plans, ID theft plans and other services.

Under terms of a settlement recently reached with officials, Discover has agreed to pay $200 million back to more than 3.5 million of its customers across the country. The money is to compensate customers who got tagged with excessive fees between Dec. 1, 2007 and Aug. 31, 2011. The company apparently fixed issues as of that last August date.

According to reports about the agreement, individuals eligible for refunds will get either a credit to their account if they are still active customers, or a direct refund by check if they are no longer cardholders.

This is likely great news for many Discover card users. For others who find themselves in serious straits because of overwhelming credit card debt, such payback efforts aren’t likely to be of much help. If you are in this latter category, there are options that may be worth considering to try to recover your financial foundation. These include Chapter 7 or Chapter 13 personal bankruptcy — legal remedies that can stave creditors off while court-supervised plans are made for eventually erasing debt obligations.

Source: Detroit Free Press, “Susan Tompor: Discover — touted as the card that pays you back — is paying up after deceptive add-on sales”, Susan Tompor, Sept. 25, 2012

  • The issues discussed in this post are the type our firm regularly handles. To learn more about our practice in this area, please visit our Stockton credit card debt page.