Discover Bank Loses Big In Collection Action

By: Joshua B. Swigart

Not wanting to be reasonable in its negotiations with consumers, Discover Bank has a tendency to file collection lawsuits.  Many consumers simply default handing the bank a judgement or feel powerless in defending.  This latest arbitration award shows how consumers can fight back.

Factual Overview

Discover Bank filed a collection lawsuit against a client for a claimed balance of over $21,000.  Not willing to be reasonable in its negotiations, our client filed for arbitration with JAMS, as was his right under the contract.  Despite having all the monthly statements showing certain charges and a balance, Discover failed to prevail at the hearing.  Not only did Discover fail to recover even one dollar, but our client was also awarded the attorney’s fees and costs he incurred in defending.

Key Take-Away Lessons

  1. Consumer arbitration is a powerful tool to defend your rights as a consumer against overreaching financial institutions and debt buyers.

  2. Under the consumer rules in California, Discover was required to pay over $20,000 in non-reimbursable arbitration fees;

  3. Ultimately, Discover collected zero from our client and must pay over $2,000 to us for attorney’s fees.

If you feel you are being mistreated in any collection action, contact our firm.  We will give you a straightforward evaluation of your claims for free.  Consumers need to understand there are options in fighting back against overreaching banks and debt collectors.  Schedule your appointment today!