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Attorney General Janet Mills Announces $30 Million Multi-State Judgment Against Marketer
October 11, 2013
The Attorneys General of 47 states and the District of Columbia announced today that Connecticut-based Affinion, and its subsidiaries Trilegiant and Webloyalty, will pay over $30 million to settle allegations that they misled consumers into signing up and paying for discount clubs and membership.
Affinion and its subsidiaries run multiple discount clubs and membership programs offering a variety of services such as credit monitoring, roadside assistance, and discounted travel. Affinion markets these programs through a series of agreements with “marketing partners” – well-known banks and retailers that present these programs to consumers often immediately after the consumer has engaged in a transaction with that partner. Affinion’s programs are marketed via direct mail, online, telemarketing, and in face-to-face sales. Affinion charges a monthly fee to consumers for these services, which continues until the consumers affirmatively cancel.
Consumers have complained that Affinion charged them for services without consumers’ authorization or knowledge, and that, once consumers learned they were being charged, some had trouble canceling or getting a refund. Other consumers were confused about who Affinion even was because the offers looked like they came from Affinion’s marketing partners, usually banks or retailers with whom the consumers did business.
The States’ investigation uncovered several of Affinion’s marketing practices that misled consumers, including a lack of clear and conspicuous disclosure aboutAffinion’s identity, and the cost and the ongoing nature of the charges. Most troubling were two specific marketing practices– live checks and online data pass. In a live check solicitation, consumers were mailed an offer that appeared to be a check – but when consumers endorsed and deposited the checks, they unwittingly authorized Affinion to enroll them in so-called “membership programs”, and to bill them each month indefinitely.
In an online data pass offer, consumers were presented an Affinion offer immediately after an online purchase from a retailer. Affinion enrolled and billed consumers without acquiring any of their account information because the marketing partner would pass that information to Affinion. As part of today’s judgment, both practices are prohibited.
Today’s agreement also requires Affinion to provide clear and conspicuous membership information to consumers after enrollment, periodic reminders of their enrollment, and any changes to Affinion’s cancellation practices.
Affinion is establishing a fund of approximately $19 million to provide refunds to consumers who received unauthorized charges for Affinion’s programs. An additional $13.5 million from the settlement is being set aside for states to further consumer protection efforts.
Consumers who believe they were improperly charged by Affinion, Trilegiant, or Webloyalty can file consumer complaints with the Attorney General at firstname.lastname@example.org or by calling 1-800-436-2131. Consumers should check their credit card and bank account statements and look for the names of Affinion’s membership programs, as that is how the company’s charges appear on their bills. A complete list of Affinion’s membership programs are listed here: [hyperlink to Membership Program List]. The complete settlement terms and refund eligibility can be found here: www.maine.gov/ag .
The States included in the settlement are Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming. The states that led the investigation were California, Texas, Tennessee, Iowa, Vermont, Washington, Oregon, Maine, and Illinois.