Many credit cards offer a selection of tools available to you in order to protect your credit card from fraud, identity theft and theft. We have all heard the offers for just an additional $X.00 a month or an annual you can get added protection to your credit card or a one time fee. Now those all sounds like good things and many people do feel the need to take advantage of them. However, recently it seems that some of Discover Cards really good sounding protection practices may have come under some really intensive financial scrutiny.
Here are some of the protection that Discover Card users are offered: payment protection, identity theft protection, wallet protection, and credit score tracker. Users will choose between a monthly or annual billing, and fees for these services vary based on your credit and score changes.
Apparently it’s not the practices that are under fire, but how the practices are sold that are at issue. “An important point is that it’s not the actual product that’s in question, it’s the way that it was sold,” said analyst Sanjay Sakhrani of Keefe, Bruyette & Woods.
Several class action law suits are being settled, but the details have not been released, however it has been stated that their sales practices have been changed.
So, I am wondering what were these sales practices and what went wrong with them? I know that the protection doesn’t come cheap, not even for someone with an outstanding credit score and may vary according not only to your credit score but your credit balance.
How can we know what companies are doing wrong if we don’t know what is the right way to do it? I personally have found the sales calls annoying when I go to update, change or check on my credit card. It seems like far too often they try to sell it to you, even when you have said no several times. But normally it just takes a few times saying “No” and they move on to the work that actually needs done.
What do you think? Have you every felt pressured to purchase credit card protection, found your protection plan payment to be unreasonable or had a plan that just didn’t work out the way you planned?
For more information on the Discover Card investigation watch this video on CBS “The Early Show.”