Sarah Mirando  |  September 20, 2011

Category: Legal News

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Discover Merchant Membership Program Class Action Settlement

By Mike Holter

 

Discover Financial ServicesSeveral businesses have won preliminary approval of a $6 million class action lawsuit settlement with Discover Financial Services (NASDAQ: DFS), United Marketing Group and other Defendants for allegedly enrolling them into, and charging them, for merchant membership programs without their authorization. As a result, all businesses that were enrolled in one of these membership programs between 2005 and 2011 can receive up to $450 from the merchant membership class action settlement.

The Discover merchant membership settlement will resolve a class action lawsuit, entitled Mc-K Sales, Inc. and Cantina 1134, LLC v. Discover Financial Services, Inc., et al., that alleges Discover, United Marketing Group and Saturday Holdings, Inc. improperly enrolled them in, and charged them for, a merchant membership program without their authorization, in violation of the Electronic Fund Transfer Act.

United Marketing Group and Saturday Holdings each offer membership programs providing businesses with access to discounts on certain goods and services. These merchant membership programs are offered to companies through telemarketing services, and companies are billed for the membership programs either through their Discover network merchant accounts or their bank accounts.

The Defendants in the merchant membership class action settlement deny all allegations, but have agreed to pay up to $6 million to resolve the litigation. Class Members covered by the class action settlement include all businesses that were enrolled in a merchant membership program (as defined below) between January 1, 2005 and June 14, 2011. These membership programs include:

(1) The Merchant Technical Solutions, Business Advisor, and Tech Experts plans offered by UMG to both Discover and other business merchants, and

(2) The Merchant Services Protection Plan, the Business Technical Care Plan, and the Merchant’s Discount Health Plan offered by SHI to Discover merchants.

Class Members have two options for filing a claim to receive cash from the Discover merchant membership program class action settlement:

Option 1. Settlement Class Members that complete and submit a timely and valid claim declaring under penalty of perjury that neither they nor an employee/agent ever authorized enrollment in membership programs for which they were charged, can receive $15 for each such membership program, up to total maximum recovery of $45.

Option 2. Settlement Class Members that complete and submit a more detailed time and valid claim, also signed under penalty of perjury, demonstrating that neither they nor an employee/agent ever authorized enrollment in membership programs for which they were charged may recover the amount of monthly membership fees, net of any prior refunds, up to a maximum of $150 for each such membership program, up to a total maximum recovery of $450. If any one of the Defendants disagrees that a claim should be paid, it will be submitted to a third-party neutral for a final ruling. In resolving a disputed claim, the third-party neutral may in his or her discretion consider the claim and any evidence, documents, or recordings submitted by the claimant or any of the Parties.

To receive your cash payment from the Discover merchant membership program class action lawsuit settlement, you must submit a claim form online or postmarked by October 13, 2011.

Claim forms and more information on your rights in the Discover Merchant Membership Program Class Action Lawsuit Settlement can be found at MerchantMembershipSettlement.com.

 

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Updated September 20th, 2011

 

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5 thoughts onDiscover Merchant Membership Program Class Action Settlement

  1. Sandy R Archuleta says:

    We found 2 unauthorized debits from our business checking account dating back to 2010. They said they called and got “authorization” from a Salon we owned but sold to Regis Corporation in 2001! We’ve contacted Regis to hold them responsible since it was their employees who gave the approval, but we’ve also called the 2 companies (United Marketing Group or UMG and MSPP). They each offered us some of our money back, but not nearly the thousands they’ve been deducted from our checking account disguised as Merchant Services. My question is if there was a lawsuit why were the companies still allowed to keep deducting from anyone’s checking accounts? The lawsuit was settled in 2011, so there is no recourse for the rest of us.

  2. Darlene says:

    Why are they still doing this in a class action suit was filed? I just figured out that the $24.95 being taken from my bank account was MSPP. I had tried unsuccessfully to find out what this charge was by contacting my credit
    card merchant and they assured me it was not one of their charges. Finally I talked with my bank and they found the phone number for me to contact MSPP. I was told I authorized them in 2007 to enroll me in discover credit protection. I am sure I did not opt in to this. They did not have the phone number of my business on record and had to locate it by name and zip code, but did inform me they had my date of birth (how hard is that to find) and I gave that to them. Just wonder how they got my bank account information, must of been shared by Discover. Anyway at this point they gave me a confirmation # for cancelling the charge and are going to give me a refund of $49.90. This is after charging the $24.95 for six years. I know I should have picked up on this sooner but they are so many charges going in and out of my business as a result of taking credit cards that I just thought it was another fee.

    1. Will says:

      Darlene / Jeannie,

      I’m in the same boat as you guys – supposedly one of my employees opted into this program in June 2008, and they have been billing my bank account directly ever since. They cannot provide the initial recording wherein this program was opted into. I am going to pursue whatever legal recourse I can.

      Any suggestions or recommendations from your experience ?

  3. Terry says:

    Just discovered (no pun intended!) that this company has been drafting out of my business account in Colorado $39.95 a month for over a year under the name Discover who processes our merchant credit cards. Is this class-action still pending because this company is continuing to rip-off merchants. Never authorized this deduction but it comes on my card as Discover

    1. Jeannie says:

      Were you ever able to get your money back? I just found out my company had been charged for almost 7 years. I thought it was a Discover thing so it was a necessary charge, but when I closed that account, they started drafting directly from our bank account as MSPP. I’m so furious! I should have done some research sooner. I tried canceling this bogus service charge, but they charged me another month instead. Trying to squeeze every little penny I suppose.

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