Discount club to pay $30M to misled customers in settlement
CONNECTICUT-BASED AFFINION, a customer loyalty company that run multiple discount clubs and membership programs through agreements with "marketing partners," will pay more than $30 million nationwide to settle allegations that they misled consumers into signing up and paying for their programs, Attorney General Peter F. Kilmartin announced Thursday.
PROVIDENCE – Attorney General Peter F. Kilmartin announced Thursday that Connecticut-based Affinion, and its subsidiaries Trilegiant and Webloyalty, will pay more than $30 million nationwide to settle allegations that they misled consumers into signing up and paying for discount clubs and memberships.
Rhode Island’s share of the settlement is approximately $67,900, according to Emily Martineau, a spokeswoman in Kilmartin’s communications office. In addition, Affinion will establish a $19 million fund to provide refunds for some consumers who may have received unauthorized charges for Affinion’s programs.
“Consumers should never be charged for a special offer or forced to opt out of a program in which they may not even realize they have been enrolled,” said Kilmartin in a prepared statement. “This deceptive practice costs consumers tens of millions of dollars per year, and today’s settlement puts companies on notice that fraudulent or deceptive marketing tactics will not be tolerated.”
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, and charge a monthly fee to consumers for these services.
Affinion markets these programs through a series of agreements with “marketing partners,” according a news release from Kilmartin’s office, which include well-known banks and retailers that often present Affinion programs to consumers immediately after the consumer has engaged in a transaction with that partner.
The Attorney General’s Office reports that consumers complained after Affinion allegedly charged them for services without authorization or knowledge, and, once consumers learned they were being charged, some claimed to have trouble canceling or getting a refund.
Other consumers reported confusion about what Affinion was because the company’s offers appeared to come from Affinion’s marketing partners.
An investigation concluded that several of Affinion’s marketing practices misled consumers, including a lack of clear and conspicuous disclosure about Affinion’s identity and the cost and ongoing nature of the charges, the Attorney General’s office said.
The settlement announced Thursday includes changes to Affinion’s business model that require the company 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.
Consumers who believe they were improperly charged by Affinion, Trilegiant or Webloyalty can contact the Consumer Protection Unit at the R.I. Attorney General’s Office by calling (401) 274-4400 or via email at firstname.lastname@example.org.
A complete list of Affinion’s membership programs can be found HERE.
For the complete settlement terms and refund eligibility, visit www.riag.ri.gov.