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Affinion Settles Allegations of Deceptive Advertising related to Enrollment
in Discount Clubs and Membership Programs
MADISON — Wisconsin Attorney General J.B. Van Hollen announced today that his office, together with the Attorneys General of 47 states and the District of Columbia, has reached a settlement with a Connecticut-based membership company, Affinion Group, Inc., and its subsidiaries Trilegiant and Webloyalty. The consent judgment, pending court approval, would require the companies to pay more than $30 million to resolve allegations that they misled consumers into signing up and paying for discount clubs and membership. Approximately $450,000.00 of the total has been designated for Wisconsin.
Affinion and its subsidiaries have 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 point of sale transactions. Affinion charges a monthly fee to consumers for these services, which continues until the consumers affirmatively cancel.
Consumers complaining to the States have alleged that Affinion charged them for services without consumers’ authorization or knowledge, and, once consumers learned they were being charged, some further 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.
If approved by the court, the consent judgment will prohibit Affinion from engaging in two particularly troubling practices, the use of “live checks” and online “data pass.” Live checks are checks sent to consumers as part of a solicitation which, when cashed, automatically enroll the consumer in an ongoing membership program. This results in many consumers being enrolled in membership programs without their knowledge. Data pass is the practice of an online retailer providing a customer’s credit card information directly to Affinion, without the customer having to re-enter the information, thus obscuring the fact that the customer has entered into a separate transaction with Affinion. Both practices lead to the same result: consumers are subject to continuing automatic monthly payments for membership programs that they were unaware they had joined.
Under the settlement, Affinion is establishing a fund of approximately $19 million to provide refunds to eligible consumers who received unauthorized charges for Affinion’s programs. Wisconsin consumers who believe they were improperly charged by Affinion, Trilegiant, or Webloyalty can file consumer complaints on line with Wisconsin Department of Agriculture Trade and Consumer Protection (“DATCP”) at http://datcp.wi.gov/Consumer/Consumer_Complaints/Online_Complaint_Form/Consumer_Complaint/index.aspx or call DATCP at 1-800-422-7218.
Consumers checking their credit card and bank account statements also should 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 Affinion’s membership programs are listed here: Membership Program List.
The states included in the settlement are the following: 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.
The state was represented by Assistant Attorney General Lara Sutherlin. The Department of Agriculture, Trade, and Consumer Protection (DATCP) also assisted in this case.
Copies of the Complaint and Consent Judgment are available at the following links: