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Credit card giant Discover is offering to pay $8.7 million to resolve a class action lawsuit accusing the company of violating the Telephone Consumer Protection Act (TCPA) by making illicit automated cellphone calls to over 9 million credit card holders despite failing to gain proper consent from their customers.
The plaintiffs in this case, Andrew Steinfeld and Walter Bradley, each are customers of Discover Financial Services’ (DFS) subsidiary Discover Bank, and have agreed to the class action settlement proposal, entered on Jan. 10. They are seeking final approval from U.S. District Judge Jeffrey S. White.
The Discover robocall settlement will resolve allegations that the financial company sent customers harassing, non-emergency calls using an automatic telephone dialing system, and had an artificial or prerecorded voice respond if answered. Neither customer gave the company consent, or had prior knowledge the defendant would do so, according to the class action lawsuit.
The plaintiffs allege the credit card company sent these illicit calls to over 9 million of its credit card holders. Steinfeld and Bradley represent the each of the concerned plaintiffs, and will divide the settlement accordingly.
“The relief the settlement provides is a very good result, particularly in view of the risks and delays involved in continued litigation, including the very substantial risk that the court would find that class members’ claims were subject to mandatory, individual arbitration,” the plaintiffs said.
Of the settlement amount, $2.2 million will be used to cover the legal fees that have accumulated throughout the litigation process. The expensive sum of the lawsuit generates from the years it has taken to reach this agreement, since the class action’s original filing in 2007. The class action lawsuit alleged that Discover had started contacting cardholders at all hours of the day, and had left recipients unable to stop them because the automated messaging system the company used did not have a stop-request option.
The legal team of the plaintiffs alleged that these actions directly and deliberately violated the TCPA, and demanded $1,500 for each violation. The Federal Communications Commission (FCC) backed the plaintiffs’ allegations, and determined DFS violated the TCPA in 2007 by using a system that had made prerecorded telephone calls to consumers who had not expressly invited or authorized the calls.
Discover argued that under FCC rules, prior consent could be given at any point in time during the credit relationship, and that the prior consent could come through their credit card contracts. This was quickly dismissed, as Discover had essentially violated all aspects of the TCPA.
A hearing for the final approval of the proposed Discover robocall settlement has been scheduled for Feb. 14, 2014. [See our instructions for how to file a claim.]
The Discover Robocall Class Action Lawsuit is Steinfeld v. Discover Financial Services, et al., Case No. 3:12-cv-01118, in the United States District Court of Northern California.
File a TCPA Lawsuit Today
If you believe that you or a loved one have been the victim of a TCPA call, you have legal options. Please visit the Text Message Spam Cellphone TCPA Class Action Lawsuit Investigation. There, you can submit your claim for a free legal review and if it qualifies for legal action, a seasoned TCPA lawyer will contact you for a free, no-obligation consultation. You will be guided through the litigation process at no out-of-pocket expenses or hidden fees. The TCPA attorneys working this investigation do not get paid until you do.
UPDATE: The Court granted final approval to the Discover Financial TCPA class action settlement on March 31, 2014. Top Class Actions viewers are reporting that settlement checks were mailed July 2nd for an average payout of $48.69. Congratulations to everyone who submitted a valid claim and got PAID!
If you missed out, sign up for our free newsletter to receive updates on new class action lawsuits and settlements. You can also check out which class action settlements are still accepting claims in our Open Class Action Settlements section.
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UPDATE: The Court granted final approval to the Discover Financial TCPA class action settlement on March 31, 2014. Top Class Actions viewers are reporting that settlement checks were mailed July 2nd for an average payout of $48.69. Congratulations to everyone who submitted a valid claim and got PAID!
If you missed out, sign up for our free newsletter to receive updates on new class action lawsuits and settlements. You can also check out which class action settlements are still accepting claims in our Open Class Action Settlements section.
Are there any updates when the payments will be sent out?