Idahoans to get refunds from deceptive discount clubs
A Connecticut-based company has agreed to pay $19.3 million in refunds to consumers who were charged for services they did not want and “memberships” in “clubs” they did not know they had joined, Attorney General Lawrence Wasden said today.
The refunds are part of a $32 million settlement that Wasden and the attorneys general of 46 states and the District of Columbia reached with Affinion and its subsidiaries, Trilegiant and Webloyalty.
The settlement resolves allegations that Affinion used misleading business practices to trick consumers into signing up and paying for discount clubs and memberships.
There are approximately 7,600 “members” of these programs in Idaho. The Attorney General estimates that Idahoans will receive approximately $500,000 in restitution, although the final amount will depend on the number of claims submitted. In addition, Affinion will pay $250,000 to reimburse the Attorney General for his costs related to the investigation.
Affinion and its subsidiaries run multiple “discount clubs” and “membership programs” with names such as Buyer Assurance, Complete Savings, HealthSaver, Identity Theft Protection, PrivacyGuard and Reservation Rewards. These clubs offer services such as credit monitoring, roadside assistance, and discounted travel.
Affinion contracts with otherwise reputable “marketing partners,” including well-known banks and retailers. The “marketing partners” present the programs to consumers, often immediately after the consumer has conducted business with the partner. Affinion pays the marketing partner for each sale and charges consumers every month until the consumers cancel the service.
“Consumers complained that Affinion charged them for services without their authorization or knowledge,” Attorney General Lawrence Wasden said. “Some also complained that once they discovered the charges, they had trouble canceling or getting a refund. Others were confused about why they had to deal with Affinion, believing the offers had come from the bank or retailer with which the consumers did business.”
The States’ investigation uncovered several misleading marketing practices, including “online data pass,” “live checks,” a lack of clear disclosure about Affinion’s identity, and the cost and ongoing nature of the charges.
In an “online data pass” offer, consumers were presented an Affinion offer immediately after making an online purchase from a retailer. To many consumers, these offers appeared to be made by the retailer. Affinion was then able to enroll and bill consumers without acquiring any of their credit card information because the marketing partner would pass that information to Affinion.
In a “live check” solicitation, Affinion mailed consumers a solicitation that appeared to be a check. When consumers endorsed and deposited the check, they unknowingly authorized Affinion to enroll them in membership programs and bill them each month indefinitely.
Thursday’s settlement prohibits both practices. It also requires Affinion to provide clear and conspicuous information to enrolled consumers regarding their membership, periodic reminders of their enrollment, and make changes to Affinion’s cancellation practices.
Eligible consumers will be notified by Affinion, Trilegiant and Webloyalty of the opportunity to seek restitution funds by December 16, 2013. Consumers who believe they were improperly charged, but do not receive a notice from the companies, should file a complaint with the Attorney General. Please note “Affinion” on the complaint form when filing it. The Attorney General will forward that complaint to the companies for processing under terms of the settlement. Complaint forms are available on the Attorney General’s website (www.ag.idaho.gov) or by calling 208-334-2424, or toll-free in Idaho, 800-432-3545. Additional information about the settlement and claims process is also available on the Attorney General’s website.
Wasden encourages Idahoans to check their credit card and bank account statements for charges from Affinion, Trilegiant or Webloyalty.
Consumers should also look for the names of Affinion’s membership programs, as that is how the companies’ charges often appear on their bills. A list of Affinion’s membership programs is available on the Attorney General’s website.