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Discover faces FDIC enforcement after probe on sales practices for credit, ID theft protection
NEW YORK (AP) ' Discover Financial Services is facing an enforcement action by the Federal Deposit Insurance Corp. over the way it sells payment protection and identity theft protection.
The Riverwoods, Ill.-based credit card company said in a regulatory filing Thursday that the investigation started several months ago and it is cooperating. Discover said the agency notified its banking division that it plans to take action.
The investigation follows a series of lawsuits in various states challenging the company's marketing policies. The company says that in June it reached a preliminary global settlement in the eight pending lawsuits. That pact still needs a judge's approval.
The credit protection business represents about 3 percent of Discover's total revenue.
Discover shares are dipping on the news, giving up 23 cents to $23.66.