Marketing Company to Pay $30 Million Over Deceptive Advertising, Unauthorized Enrollment in Membership Programs
Affinion Settles Allegations of Misleading Consumers, Charging for Discount Clubs and Memberships; More than 4,100 Massachusetts Consumers Eligible for Restitution
BOSTON – A Connecticut-based marketing company and its subsidiaries have agreed to pay more than $30 million to settle allegations that they misled consumers into signing up and paying for discount clubs and membership programs, Attorney General Martha Coakley announced today.
AG Coakley joins 46 states and the District of Columbia in the settlement with Affinion, and its subsidiaries Trilegiant and Webloyalty, alleging they deceptively advertised and charged consumers for multiple discount clubs and membership programs offering a variety of services such as credit monitoring, roadside assistance, and discounted travel.
“These companies allegedly charged consumers for services without their authorization or knowledge, and made it difficult for some to cancel them or receive a refund,” AG Coakley said. “We are pleased that this settlement will bring money back to those who were wrongfully charged for these unwanted programs, and that the deceptive practices will stop.”
Affinion markets these programs through a series of agreements with well-known banks and retailers (“marketing partners”) that present the programs to consumers often after the consumer has engaged in a transaction with them. 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 until the consumer cancels them.
An investigation into Affinion revealed that it misled consumers by failing to clearly and conspicuously disclose to consumers its identity and the cost and ongoing nature of the charges. The investigation also uncovered several deceptive marketing practices, including Affinion’s use of “live check” solicitations (i.e., checks which, when endorsed by consumers, had the effect of enrolling them indefinitely in membership programs) and online data pass offers (i.e., offers presented immediately after an online retail purchase from one of Affinion’s marketing partners, which enabled Affinion to enroll and bill consumers without independently acquiring any of their account information).
As part of today’s settlement, these misleading marketing practices will be prohibited. The agreement also includes further changes to Affinion’s business model by requiring them to provide clear information to consumers after enrollment regarding their membership, periodic reminders of their enrollment, and changes to Affinion’s cancellation practices.
Affinion has agreed to establish a restitution fund of more than $19.3 million to provide refunds to eligible consumers in the participating states who received unauthorized charges for the membership rewards programs. More than 4,100 Massachusetts consumers are eligible to receive restitution from this settlement. Consumers who believe they were improperly charged by Affinion, Trilegiant, or Webloyalty may contact the Attorney General’s Public Inquiry & Assistance Center Hotline at (617) 727-8400, or file a complaint on the Attorney General's website.
Assistant Attorneys General Jacqueline Rompre and Gillian Feiner of Attorney General Coakley’s Consumer Protection Division are handling this matter for the Commonwealth with assistance from the Attorney General’s Public Inquiry and Assistance Center.
The other states joining the settlement with Affinion include Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, 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.