Phoenix, AZ (Thursday, October 10, 2013) -- Arizona Attorney General Tom Horne, along with 46 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 that offered a variety of services such as credit monitoring, roadside assistance, and discounted travel. The company marketed these programs through a series of agreements with “marketing partners” – well-known banks and retailers that presented the programs to consumers immediately after the consumer had engaged in a transaction with that partner. Affinion’s programs were marketed via direct mail, online, telemarketing, and in face-to-face point of sale transactions. They charged a monthly fee to consumers, which continued until they were cancelled.
Consumers complaining to the States have alleged that Affinion charged them for services without authorization or knowledge, and, once consumers learned they were being charged, some had trouble canceling or getting a refund. Other consumers were confused about who Affinion was because the offers looked like they came from Affinion’s marketing partners, which usually were banks or retailers with which 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 about Affinion’s identity, and the cost and ongoing nature of the charges. Most troubling were two marketing practices– live checks and online data pass. In a live check solicitation, people were sent (via direct mail) an offer that appeared to be a check – but when they endorsed and deposited the checks, the consumers unknowingly authorized Affinion to enroll them in membership programs, and to bill them each month indefinitely. In an online data pass offer, people were presented an Affinion offer immediately after an online purchase from a retailer. Affinion was then able to enroll and bill 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 includes further changes to Affinion’s business model by requiring the company to provide clear and conspicuous information regarding membership. This will include periodic reminders of enrollment, and changes to Affinion’s cancellation practices.
Affinion is establishing a fund of approximately $19 million to provide refunds to eligible consumers who received unauthorized charges for their programs. Consumers who believe they were improperly charged by Affinion, Trilegiant, or Webloyalty can file a consumer complaint with the Arizona Attorney General at http://www.azag.gov or may request a mailed complaint form by calling (602) 542-5763 (Phoenix), (520) 628-6504 (Tucson) or (800) 352-8431 (Toll-free outside of metro Phoenix). To be considered for a refund under this settlement, consumers must file their complaints before February 14, 2014. Consumers checking their credit card and bank account statements should also be looking for the names of Affinion’s membership programs, as often that is how the company’s charges appear on their bills. A complete list of membership programs are attached. The complete settlement agreement, which is subject to court approval, is also attached.
The States included in the settlement are Alabama, Alaska, 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 District of Columbia also joined.