FOR IMMEDIATE RELEASE
October 10, 2013
AG STRANGE ANNOUNCES $30 MILLION NATIONAL
SETTLEMENT AGAINST NEGATIVE OPTION MARKETER
Affinion Settles Allegations of Deceptive Advertising
and Enrollment in Discount Clubs and Memberships
(MONTGOMERY)—Attorney General Luther Strange announced a national settlement in which the Connecticut-based company Affinion agrees to pay more than $30 million to resolve allegations that it misled consumers, through negative option marketing, into signing up and paying for discount clubs and memberships. The agreement is between the Attorneys General of 47 states and the District of Columbia, and Affinnion’s subsidiaries Trilegiant and Webloyalty.
Affinion and its subsidiaries 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 even 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 of Affinion – live checks and online data pass.
In a live check solicitation, consumers were sent via direct mail an offer that appeared to be a check – but when consumers 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, consumers 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 Affinion to provide clear and conspicuous information to consumers after enrollment regarding their membership, periodic reminders of their enrollment, and changes to Affinion’s cancellation practices.
Affinion is establishing a fund to provide refunds to some consumers who received unauthorized charges for Affinion’s programs. Alabama consumers who believe they were improperly charged by Affinion, Trilegiant, or Webloyalty may file consumer complaints with Attorney General Strange’s Consumer Protection Section by calling toll-free 1-800-392-5658 or through the website at http://ago.alabama.gov/Page-Consumer-Protection. Consumers must file their complaints by February 14th, 2014, to be eligible for a refund.
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 Affinion’s membership programs are listed here: http://www.ago.state.al.us/news/393.pdf. The States included in the settlement are 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.
Affinion Membership Programs