Discover: The card that pays you back after you overpay

Discover Bank will pay millions in fees to settle accusations by regulators that it pressured credit card customers to buy costly add-on services like payment protection and credit monitoring.

Discover, the sixth-biggest U.S. credit card issuer, will pay a $14 million fine and refund $200 million directly to more than 3.5 million customers, federal authorities said Monday.

The company's call-center workers enrolled customers in the programs without their consent, misled them about the benefits and left customers thinking the products were free, regulators said.

The action was brought by the new Consumer Financial Protection Bureau and the Federal Deposit Insurance Corp. Discover said this summer that it expected an enforcement action about add-on products.

It is only the third public enforcement action by the consumer bureau, which was created under the 2010 financial overhaul law to protect consumers from excessive or hidden fees and other financial threats. The first was a similar order against Capital One, another big issuer of cards.

American Express also expects to pay refunds and fines related to add-on products, according to its most recent quarterly filing with regulators.

Discover is part of Discover Financial Services. In a statement late Friday, chairman and CEO David Nelms said: "We have worked hard to earn the loyalty of our cardmembers, and we are committed to marketing our products responsibly."

Discover's telemarketing scripts included misleading language that confused consumers about whether they were buying a product or just agreeing to consider it, the agencies said. They said telemarketers spoke quickly during the part of the call where the prices and terms of products are described.

The order mentions four products sold by Discover: Payment Protection, Credit Score Tracker, Identity Theft Protection and Wallet Protection. Anyone who paid for those services between Dec. 1, 2007, and Aug. 31, 2011, will be repaid at least 90 days' worth of fees. About 2 million customers will be repaid all of the fees they were charged.

In addition to the refunds and fine, Discover agreed to change its telemarketing approach and employ an independent auditor to oversee its compliance with the order.