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Discover Financial Services (NYSE:DFS) entered a settlement to resolve a class-action lawsuit accusing it of overcharging merchants, according to a recent filing with the U.S. Securities and Exchange Commission.
The credit-card issuer had boosted its liability to provide refunds as a result of the card product misclassification to $1.2B as of March 31, 2024.
All payments under the settlement are expected to be covered by that amount, the Wednesday filing said.
Discover’s (DFS) misclassification issue weighed on its bottom line in Q1 2024. “Expenses were elevated due to our action to advance the resolution of our card misclassification issue,” Interim CEO and President Michael Shepherd had said in a statement.