EAST ST. LOUIS, Ill. (CN) – Discover Bank and Morgan Stanley enroll credit card holders in a “payment protection” plan without their consent and refuse to issue refunds when they try to cancel the “service” they never ordered, disgruntled customers say in a federal class action.
Named plaintiff Marti Kelmer says the defendants contact customers and claim to be sending them information about the program. But the defendants actually send a package with the terms of the plan, informing customers they already have been enrolled, the complaint states.
Kelmer claims the package includes an “Election and Acknowledgement Form.” By signing the form, the customer states that he or she has read the plan and wanted to buy it.
“At the bottom of the form, the following language is found: ‘Note: Regardless of whether you send this form back to us, you are still enrolled in Payment Protection until canceled,'” the complaint states.
Kelmer says that when he called to cancel, the defendants refused to refund the money they already had taken. Kelmer says the defendants tell customers they have proof that they consented to the enrollment – but refuse to provide proof of this consent.
The class consists of all Americans who were enrolled in the payment protection plan without consent and were charged a monthly fee. They seek damages and an injunction.
The class is represented by John Carey of St. Louis.
Discover Bank, Morgan Stanley, DFS Services and Discover Financial Services are named as defendants.