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Discover accepts $200m compensation to cardholders for extra credit-protection product charges

Discover Bank, a subsidiary of Discover Financial Services (DFS), has agreed to compensate $200m to cardholders who were misled by its call-center representatives for charging them extra for certain credit-protection products over the phone.

The resolve was reached as part of an agreement with US regulators, the Federal Deposit Insurance Corporation (FDIC) and Consumer Financial Protection Bureau (CFPB), in addition to accepting to pay a penalty of additional $14m to the regulators, as reported by Reuters.

The bank was already notified by the regulators over its marketing practices for fee-based protection products, such as balance protection, in January this year and had then agreed to refund money to cardholders.

The company charged its consumers extra amount for the products, which were purchased over telephone from December 2007 to August 2011.