After feds allege tricky marketing, Discover to refund $200 million and pay $14 million fine

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Discover cards are pictured in Overland Park, Kan. Thursday, June 23, 2011. THE CANADIAN PRESS/AP, Charlie Riedel

WASHINGTON – Discover Bank is paying $214 million to settle charges that it pressured credit card customers to buy costly add-on services like payment protection and credit monitoring.

Federal regulators in the U.S. said Monday that Discover call-centre workers enrolled customers in the programs without their consent, misled them about the benefits and left customers thinking the products were free.

Discover will pay a $14 million fine and refund $200 million directly to more than 3.5 million customers.

The action was taken by the new Consumer Financial Protection Bureau and the Federal Deposit Insurance Corp. Discover said this summer that it expected an enforcement action about add-on products.

The consumer agency was created under the 2010 financial overhaul law to protect consumers from excessive or hidden fees and other financial threats.

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