Tens of thousands of student loan borrowers will receive refunds from Discover Financial Services after the government slapped the firm with $18.5 million in penalties for overstating the amount of money people owed and illegally harassing them to repay their debt, The Washington Post reported yesterday. In its first action against a student lender, the Consumer Financial Protection Bureau on Wednesday said Discover listed higher minimum payments than the ones outlined by the original terms of the loans. The government agency also said the company denied consumers information needed to get a tax deduction for the interest paid on their loans. The company is also accused of illegally calling borrowers at all hours and failing to provide them information about the amount and source of their debt. Under the agreement, Discover will return $16 million to consumers. About 130,000 people will be reimbursed up to $300 to amend their 2011 or 2012 tax returns to claim the student loan interest deductions or receive an account credit of $75 for each tax year. Roughly 5,200 borrowers who were misled about the minimum payments will receive a check or account credit for up to $500. And 5,000 people will either get $92 for receiving five to 25 unlawful collection calls or $142 for more than 25 calls.
