In 2015, the CFPB fined Discover Bank for engaging in “illegal student loan servicing tactics,” that affected “about 100,000 consumers.” The bank also “overstated the minimum amounts due each month, violated debt collection practices and denied customers information needed to get federal income tax breaks.” The bank was required to “refund $16 million to student loan customers and pay a $2.5 million penalty” per the consent order.

• “Discover’s student loan affiliates,” Student Loan Corp. and Discover Products Inc., were also named in the filing. [Teresa May Dixon, “Discover Bank engaged in illegal student loan servicing, must pay $16 million to 100,000 customers,” The Plain Dealer, 07/23/15]

• After “acquiring more than 800,000 accounts from Citibank,” Discover “didn’t properly service some of those loans because it gave customers inaccurate account statements that inflated the minimum amount due, which caused a hardship in some cases, and incorrectly charged interest on loans that were still in deferment. The company also called customers’ cellphones at ‘inappropriate times,’ meaning before 8 a.m. and after 9 p.m. to talk to them about their delinquent accounts.” [Teresa May Dixon, “Discover Bank engaged in illegal student loan servicing, must pay $16 million to 100,000 customers,” The Plain Dealer, 07/23/15]

• Consumers “who were misled about their minimum payments are entitled to $100 or 10 percent of their overpayment, up to $500,” “had to amend their 2011 or 2012 tax returns to claim student loan interest deductions will be reimbursed for tax preparation costs up to $300. Others will be eligible to get up to $75,” and “were subjected to inappropriate collection calls will get $92 to $142 depending on how many collection calls they received.” Discover was also ordered to “cease the illegal practices and pay $2.5 million to the CFPB’s Civil Penalty Fund.” [Teresa May Dixon, “Discover Bank engaged in illegal student loan servicing, must pay $16 million to 100,000 customers,” The Plain Dealer, 07/23/15]