TOPEKA – (October 10, 2013) – Kansas consumers who were misled into signing up and paying for discount clubs and memberships may be entitled to refunds, Kansas Attorney General Derek Schmidt announced today.
Schmidt, along with the attorneys general of 46 other states and the District of Columbia, have settled a lawsuit against Connecticut-based Affinion, and its subsidiaries Trilegiant and Webloyalty. The attorneys general alleged the company engaged in deceptive practices to entice consumers to sign up for multiple discount clubs and membership programs. The services offered by the company included credit monitoring, roadside assistance and discounted travel.
“Consumers have a right to be clearly informed about the services they are purchasing – and the cost,” Schmidt said. “Today’s settlement returns to consumers charges for programs they didn’t know they were signing up for and were often unable to cancel.”
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 point of sale transactions. Affinion charges a monthly fee to consumers for these services, which continues until the consumers affirmatively cancel.
The attorneys general in many states received complaints regarding Affinion’s conduct. These complaints included consumers being charged for services without their authorization or knowledge. Once consumers learned about these charges, they found it difficult or impossible to cancel. The investigation revealed several deceptive marketing practices by Affinion, including a lack of clear disclosure about the company’s identity and the cost or ongoing nature of these charges. In one type of solicitation, Affinion sent consumers a direct mail solicitation, which looked like a check, but when consumers endorsed or deposited the check, they unknowingly signed up for a membership program, and were billed each month for the program. Affinion also made online solicitations, which would appear on a consumers screen following a transaction with an online retailer. Affinion would then enroll and bill consumers without asking for any of their account information, because the marketing partner would pass that information on to Affinion.
As part of today’s settlement, Affinion is required to change their business model. The deceptive practices are prohibited, and the company is now required to provide consumers with clear and conspicuous information about the programs they are enrolling in and periodically remind consumers about their enrollment. Affinion is also required to make changes to its cancellation policy.
A fund is being established to provide approximately $19 million in refunds to consumers who received unauthorized charges for Affinion’s programs. A complete list of the names of the membership programs offered by Affinion, is available at http://1.usa.gov/16xWj9b. Consumers should check their bank statements and credit card bills for the names of any of these programs. Consumers who believe they may have been improperly charged for services provided by Affinion, Trilegiant or Webloyalty should file a complaint with the Attorney General’s Office at www.ag.ks.gov before February 14, 2014. Certain Kansas consumers will also be notified by mail or email if they are entitled to refunds.