TX obtains $30M judgement against membership program marketers
AUSTIN, TX (ATTORNEY GENERAL'S OF TEXAS OFFICE) — The State of Texas, 47 states and the District of Columbia announced the resolution of a multistate investigation into membership program providers Trilegiant and Webloyalty, and the defendants’ parent company Affinion.
The defendants operated multiple membership-only services to customers, including programs that promised reduced-cost travel, roadside assistance and credit monitoring. According to investigators, the defendants relied on unlawful practices to recruit and deceive their customers. Under today’s agreement, the defendants must pay restitution and provide full and clear disclosure about the terms of the memberships to those customers who do voluntarily enroll in the defendants’ programs.
Investigators also found that the defendants billed customers each month but failed to disclose the fact that customers were actually obligated to a third party not affiliated with their banks or retailers. Customers then had to take steps to ensure they had cancelled the services to stop the billing, and many could not obtain requested refunds from defendants. The $19 million restitution fund included in the total payment to states will address these concerns on behalf of eligible customers.
Two specific practices that prompted the states’ enforcement action were the defendants’ routine use of live check solicitations and online data pass offers. Customers who received a live check in a direct mail solicitation and deposited the check into their banks initially did not realize that – by merely cashing the check – they had been automatically enrolled in one of the defendants’ services. Online data pass offers occurred when customers received defendants’ offers immediately after making an online purchase from a retailer. Trilegiant and Webloyalty could then enroll and start billing these customers using personal account information which the retailer had conveyed during the purchase.
Texans seeking refunds from Affinion and its subsidiaries regarding unauthorized charges may file complaints with the Office of the Attorney General by calling (800) 252-8011 or complete a complaint form online at www.texasattorneygeneral.gov.