Another Credit Card Company Nabbed for Alleged Fraudulent Practices

Another day, another major credit-card issuer handing over a hefty sum over alleged fraudulent practices. This time, Discover is the one paying up to the tune of $18.5 million related to its student-loan business.

The Consumer Financial Protection Bureau, the same agency that just got  Citibank for $700 million, has issued a consent order requiring Discover to issue checks to borrowers.

The CFPB alleges that Discover did the following:

• Overstated minimum monthly payments for borrowers who'd just begun to repay loans.

• Failed to give some borrowers proper tax information that would have allowed them to take write-offs.

• Called borrowers before 8am and after 9pm.

• Didn't give borrowers specific information on the amount owed or how to contest charges.

Discover hasn't yet denied nor admitted wrongdoing will also have to pay a $2.5 million fine to the CFPB.