Discover Financial Services may face disciplinary action after its marketing tactics for identity theft
protection services were questioned by the Federal Deposit Insurance Corporation, The Associated Press reports.
The investigation has been underway for several months, after the company's telemarketers were found to have used shady sales ploys to sell services such as payment protection, identity theft
, wallet protection and consumer credit score tracking. Bloomberg Businessweek reports that in December 2010, Minnesota Attorney General Lori Swanson sued the company, claiming its telemarketers didn't explain what customers were agreeing to before purchasing the services. The products generated more than $300 million for Discover in 2009. "An important point is that it's not the actual product that's in question, it's the way that it was sold," said analyst Sanjay Sakhrani of Keefe, Bruyette & Woods, as quoted by the news source. Since the investigation, Discover has made changes to its fee-based products and programs that it believes "substantially address the FDIC's concerns," according to Bloomberg. The company added that it's currently cooperating with the probe.