States Announce $30 Million Settlement with Seller of Discount Clubs and Membership Programs - Alaskans May be Eligible for Refunds
October 10, 2013
The attorneys general of 47 states and the District of Columbia announced today that Connecticut-based Affinion, and its subsidiaries Trilegiant and Webloyalty, will pay more than $30 million to settle allegations that they misled consumers into signing up and paying for unwanted services.
Affinion and its subsidiaries run discount clubs and membership programs offering services such as credit monitoring, roadside assistance, and discounted travel. Affinion markets these programs through agreements with “marketing partners.” In a typical scenario, a consumer completes an online transaction with a retailer, bank, or other business that is an Affinion marketing partner, and then receives an offer that appears related to the recently completed transaction. By accepting the offer, the consumer is enrolled in an Affinion program. Affinion charges the consumer a monthly fee for the program, and the monthly fee continues indefinitely until the consumer cancels the service.
Complaints from consumers alleged that Affinion charged them for services without their authorization or knowledge. Once they learned of the charges, consumers had trouble canceling or getting full refunds. Consumers were also confused about Affinion’s identity, because the offers looked as though they came from the banks or retailers the consumers did business with.
One reason consumers didn’t know they were being billed by Affinion was due to a practice known as “data pass.” This allowed Affinion to enroll and charge consumers using credit card information it received from its marketing partners, without consumers providing their account information directly to Affinion. As part of today’s settlement, this practice is prohibited. Affinion must also give consumers clear information about their membership, including periodic reminders of their enrollment. Affinion must also change its cancellation practices.
Affinion is establishing a fund of approximately $19 million to provide refunds to some consumers who were charged for Affinion’s programs without their authorization. Alaskans who believe they were improperly billed by Affinion should file complaints with the Consumer Protection Unit of the Alaska Attorney General’s Office. Consumers should check their bank statements and credit card bills for the names of Affinion’s programs (PDF 384K). Complaint forms are available on the Consumer Protection Unit website or by calling (907) 269-5200, or toll free, (888) 576-2529. For questions about the settlement, please contact Assistant Attorney General Cynthia Drinkwater at (907) 269-5200.
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