Discover Financial Services has agreed to settle a class-action lawsuit for overcharging merchants, with the company expecting to resolve the matter with the $1.2 billion it has already set aside for related liabilities. The lawsuit stemmed from Discover’s misclassification of certain credit-card accounts into its highest pricing tier, resulting in merchants being charged more than they should have been to accept the cards for payment. The settlement, which is subject to court approval, was reached on Monday between Discover and retailers affected by the misclassification. The agreement comes as Discover prepares to be acquired by Capital One Financial Corp. in a $35 billion all-stock deal.
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