FDIC Scrutinizes Discover's "Payment Protection" Plan

The FDIC is looking into Discover over concerns that they deceptively marketed their “payment protection plan” for their credit card. Under the plan, if you were experiencing hardship you could put payments on hold for up to two years. Sounds great, but buried in the fine print was that you would end up paying a 10.5% monthly fee for the pleasure of doing so.

The disclosure read that you would pay a fee equal to the “total balance at the end of each monthly billing period (including any partial monthly billing period at the beginning of your enrollment), multiplied by 89¢ per $100.”

In addition, one of the class action lawsuits against Discover Financial Services alleges that some customers who were called up and pitched the Payment Protection Plan and declined to sign up were enrolled anyway without their knowledge.

FDIC Probing Discover Payment Protection [The Street]