AG Gansler Reaches Settlement with Three Marketing Companies
Consumers misled into signing up, paying for unwanted membership programs.
Baltimore, MD (Oct. 10, 2013) - Attorney General Douglas F. Gansler announced today that his Consumer Protection Division, joined by the offices of 48 other Attorneys General, entered into a settlement resolving allegations that Connecticut-based Affinion Group, Inc., and its subsidiaries, Trilegiant Corporation and Webloyalty.Com, Inc., (referred to collectively as "Affinion") misled consumers into joining and paying for unwanted membership programs.
"Aggressive and misleading sales tactics caused many Marylanders to unknowingly become enrolled and charged for membership programs they did not want," said Attorney General Gansler. "This settlement is an important victory for consumers victimized by Affinion who will now be eligible to get their money back."
Affinion's membership programs included services such as credit monitoring, roadside assistance and travel discounts. The programs were presented to consumers through a series of agreements with "marketing partners" - often banks and large retailers - that allowed Affinion to advertise its programs immediately after a consumer had completed a transaction with that partner. The programs were known by a variety of different names, such as "Buyers Enhanced," "Shoppers Advantage," and "Charter Rewards." A complete list of the Affinion membership program names can be found here.
Attorney General Gansler alleged in a Complaint filed today in the Circuit Court for Baltimore City that Affinion misled consumers in violation of the Maryland Consumer Protection Act by failing to disclose that if consumers did not cancel "free trial memberships" to Affinion's membership programs, they would be charged monthly fees.
Attorney General Gansler further alleged that Affinion's use of live checks and online data pass as marketing practices misled consumers. In a live check solicitation, consumers received an offer that appeared to be a check for a small amount of money. But when consumers endorsed and deposited the checks, the consumers unknowingly authorized Affinion to enroll them in membership programs, and to charge them each month indefinitely. In an online data pass offer – a practice that has been illegal since late 2010 with the passage of the Restore Online Shoppers Confidentiality Act -- consumers were presented an Affinion offer immediately after an online purchase from a retailer. Affinion was then able to enroll and charge consumers without having to acquire any of their account information because the marketing partner would forward it to Affinion. The Consumer Protection Division alleged that many of the consumers were unaware they were enrolling in the Affinion programs. Under the terms of the settlement, both practices are prohibited.
The settlement also requires Affinion to substantially change its business model by requiring Affinion and its subsidiaries to, among other things:
- clearly and conspicuously disclose all material terms to consumers who enroll in its membership programs, including that the memberships may change from free trials to monthly payments;
- only enroll consumers into its membership programs who agree to sign up;
- send consumers periodic notices informing them that they are being charged for the memberships; and
- make it easier for consumers to cancel their memberships.
Affinion agreed to pay the Attorneys General $13.5 million and is also establishing a fund in excess of $19 million to pay refunds to victims. Consumers who believe they may be entitled to refunds from any of the three marketing companies can file complaints with the Consumer Protection Division by:
To be eligible for a refund, consumers must file their complaints with the Attorney General's Office by February 13, 2014.