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District to Receive $250,000 from Discount Club Settlement

Thursday, October 10, 2013

District to Receive $250,000 from Discount Club Settlement

CONTACT:  
Ted Gest, Public Information Officer
202-727-6283
ted.gest@dc.gov

WASHINGTON, D.C. – The District of Columbia will receive $250,000 in a settlement reached by the District and 47 states with Connecticut-based Affinion and its subsidiaries Trilegiant and Webloyalty to resolve allegations that they misled consumers into signing up and paying for discount clubs and memberships, Attorney General  Irvin B. Nathan announced today.

Affinion runs various discount clubs and membership programs offering services such as credit monitoring and discounted travel.  Affinion markets these programs through “marketing partners,” such as Classmates.com, that offer these programs to consumers, often immediately after the consumer has engaged in a transaction with that partner.  In many instances, such offers were presented to consumers under the guise of a rebate, in which consumers who accepted the rebate offer were actually enrolling in one of Affinion’s programs.

In a complaint filed today in D.C. Superior Court, the District alleged that Affinion and its subsidiaries

  • Failed to disclose clearly and conspicuously the actual terms and conditions that applied to their offers;
  • Used misleading language when offering incentives and trial offers;
  • Misrepresented, through the use of their marketing partners’ names and logos and references to the marketing partners in solicitations, that consumers are receiving solicitations from the marketing partners;
  • Failed to disclose adequately that automatic renewal billing would apply if a consumer joined the defendants’ membership programs.

Today’s settlement, which is subject to court approval, includes 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. The District’s share of the total $13.5 million settlement for all participating jurisdictions was allocated under a formula based on the District’s contributions to the multi-state investigation.

Consumers who believe they were improperly charged by Affinion or its subsidiaries may also be eligible for refunds. Consumers may file complaints with the D.C. Attorney General’s office at consumer.protection@dc.gov or by calling (202) 442-9828.  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 in the attachment.

In July, Classmates.com agreed in a settlement with the District to improve its disclosures to District consumers and pay $300,000 to settle allegations of misleading practices. The online social networking website agreed to clarify in solicitations that consumers are not necessarily people they know and to provide automatic-renewal reminder notices to D.C. consumers with subscription terms of one year or more so that they can choose not to renew their subscriptions.

Attachment(s): 
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Affinion product names.pdf288.32 KB