State reaches settlement with Affinion and subsidiaries

JACKSON — Connecticut-based Affinion, and its subsidiaries Trilegiant and Webloyalty, will pay over $30 million to settle allegations that they misled consumers into signing up and paying for discount clubs and membership, according to a release from the Mississippi Attorney General’s Office.

Affinion is establishing a fund of approximately $19 million to provide refunds to some consumers in Mississippi and 46 other states who received unauthorized charges for Affinion’s programs.

According to the release, 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 onlinedatapass. 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-datapass 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 wouldpassthat information to Affinion. As part of the recent settlement, both practices are prohibited.

The 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.

Mississippi consumers who believe they were improperly charged by Affinion, Trilegiant or Webloyalty can file consumer complaints with the Consumer Protection Division of the Mississippi Attorney General’s Office.  Complaint forms may be obtained at www.agjimhood.com or by contacting the Consumer Protection Division at (601) 359-4230 or 1-800-281-4418. The deadline to submit complaints to the Attorney General’s Office is Feb. 14, 2014.

 

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