The Federal Deposit Insurance Corp. is reviewing Discover Financial Services' marketing of payment protection and other fee-based products.
The Riverwoods, Ill., credit card lender said Friday in a filing with the Securities and Exchange Commission that the review could lead to an enforcement action by the FDIC.
Discover representatives did not immediately return calls for comment Friday morning.
Bloomberg News first reported the disclosure, which Discover included as a line in its 10-Q earnings report for the most recent fiscal quarter.
Discover has previously been the target of lawsuits over its marketing of certain add-on products it markets to its credit cardholders.
The Minnesota Attorney General's Office filed a lawsuit against the company in December for its sales tactics for payment protection, identity theft and other services, accusing Discover of making "aggressive, misleading, and deceptive telemarketing calls to sign people up for these products."
In some instances Discover charged cardholders for the services even if the customers did not agree to sign up for them, according to the Minnesota AG.
Discover's payment protection plan allows borrowers to put their payments on hold for up to 24 billing periods as a result of a disability, family death, job loss and other hardship events. Cardholders can also postpone payments for 1 billing cycle in the event of marriage, new job, graduation, move or other events if they use the service, according to Discover's website.
A press release from the Minnesota AG said the service costs 89 cents for every $100 of outstanding balance a cardholder carries each month.
Discover generated $105.1 million in revenue from fee products in the fiscal quarter ending May 31, up 3.7% from a year earlier, according to the earnings report.
