Discover Financial

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Discover Financial Services, Inc.
Traded as NYSEDFS
S&P 500 Component
Industry Financial services
Founded 1985; 31 years ago (1985) (as a subsidiary of Sears)
Headquarters Riverwoods, Illinois, U.S.
Key people
David Nelms
(Chairman and CEO)
Products Payment systems
Revenue Increase US$ 8.73 billion (FY 2015)[1]
Increase US$ 3.6 billion (FY 2015)[1]
Increase US$ 2.2 billion (FY 2015)[1]
Total assets Increase US$ 88.09 billion (2016)[2]
Total equity Increase US$ 8.2 billion (FY 2011)[3]
Number of employees
11,650 (FY 2011)[3]

Discover Financial Services, Inc. is an American financial services company, which issues the Discover Card and operates the Discover and Pulse networks. Discover Card is the third largest credit card brand in the United States, when measured by cards in force, with nearly 50 million cardholders.


The Discover Card was originally introduced by Sears in 1985, and was a unit of Dean Witter, which merged with Morgan Stanley in 1997. In 2007, the unit was spun off as an independent, publicly traded company. Today, Discover is headquartered in the Chicago suburb of Riverwoods, Illinois.

On December 21, 2001, Fourth quarter income at Discover card issuer Discover Financial Services Inc. grew 31% to $193 million, compared with $147 million the year before.[4]

On March 5, 2002, the company announced that the Account Center at had registered over eight million card members, an increase of 61 percent since January 2001.[5] That September, they announced that, as of September 1, Citibank would accept the Discover(R) Card for cash advances at its approximately 450 Financial Centers and more than 2,000 ATM locations nationwide.[6]

Criticism and Controversy

In August 2016 Discover Financial was sued in the US District Court of Northern Texas case number 3:16-cv-2259 for alleged discrimination, misleading information and lying to customers, violating customer’s rights and unfair assessment and collection of Overdraft Fees and interest. The lawsuit against Discover Financial alleged that Discover Financial lack of customer service for its loans and banking departments in Spanish is discriminatory and in violation of ECOA, due that some customers after getting their loans approval, customers requires to call that specific department for that loan and are confronted with the lack of spanish speaking representatives, stopping customers from accessing that financial product, a very unfair disadvantage. Also is based on alleged evidence that Discover Financial inform its customers after they chose to deactivated their credit account for lost or stolen card, that one deactivation process is completed, customers do not need to worry, Discover have you cover: Once you confirm this request, you will get a new account number. Card (S) for account number ending in XXXX WILL NO LONGER WORK, but actually even when customers accounts are deactivated Discover still processing charges against customer's rights and misleading its customers with false statement incurring in possible extra fees and interest charged to customers.

Discover acquires Diners Club[edit]

In April 2008, Discover Financial and Citigroup announced that Discover was purchasing the Diners Club network from Citigroup for $165 million. In May 2008, the Federal Trade Commission approved the transaction. The deal was completed on July 1, 2008.[7] Discover stated that the Diners Club network, which is a major network outside North America, will be merged with the Discover Network, a major network in North America, creating an international network for Discover Network cards and Diners Club cards. Diners Club cards will continue to be issued by Diners Club International licensees. Discover Bank has no plans on issuing Diners Club branded cards itself.

On September 17, 2010, it was announced that Discover Financial would acquire Citigroup-owned Student Loan Corporation for $30/share.[8] The deal was finalized on December 31.[9]

Discover acquires Home Loan Center[edit]

On June 6, 2012,, Inc. completed the sale of substantially all of the operating assets of its Home Loan Center, Inc. business to a wholly owned subsidiary of Discover Financial. In exchange for the assets sold, Discover paid an aggregate of $45.9 million including payments made prior to the closing which were applied to the closing price.[10] On June 12, 2012, Discover began originating mortgages with its launch of Discover Home Loans, offering prime variable- and fixed-rate conventional and FHA home mortgage loans.

Discover and TARP[edit]

Following the 2007-08 financial crisis, Discover received about $1.2 billion in bailout funds under the Troubled Asset Relief Program, also known as TARP. The company announced in 2010 that it had received approval to pay back the funds.[11]


In the United States, Discover, as a card brand, competes primarily with Visa, MasterCard, and American Express.[citation needed] Unlike Visa and MasterCard, Discover directly issues its cards, through its Discover Bank unit.[citation needed] Discover is the fourth largest credit card issuer, when measured by card balances, behind Bank of America, JPMorgan Chase, and Citi, and ahead of Capital One and American Express.[citation needed]


In addition to its card products, Discover also markets savings products, personal loans, student loans, and home mortgage loans. The company also began offering a Discover Debit card product directly to banks in 2006, through its Pulse interbank network, which Discover acquired in 2004.

Marketing tactics[edit]

The United Kingdom arm, Discover Financial, have a pattern of persistent cold-calling and unwanted marketing.[4] The company has cited cold-calling as one of their key-strategies in seeking new custom.[5] The company's failure to respond to reminders from victims about the distress caused by daily unsolicited calls has been described as frustrating and questionable.[12]


External links[edit]