October 11, 2013

Pa. joins 46 states in $30 million multi-state settlement reached on allegations of deceptive advertising and enrollment in discount clubs

HARRISBURG - Attorney General Kathleen G. Kane today announced that Pennsylvania has joined 46 states and the District of Columbia in a $30 million settlement with Connecticut-based Affinion Group Inc., and its subsidiaries Trilegiant Corp. and Webloyalty.com. Affinion and its subsidiaries allegedly misled consumers into signing up and paying for discount clubs and memberships.

Attorney General Kane said the state has a pool of approximately 13,000 claimants who could potentially recover more than $800,000; the state will receive $450,000 for public protection and education purposes.

According to the settlement, Affinion ran multiple discount clubs and membership programs, which offered a variety of services to consumers such as, credit monitoring, roadside assistance and discounted travel.

These programs are promoted through direct mail, online, telemarketing and point of sale transactions. Affinion charges a monthly fee to consumers for these services, which continues until the consumer affirmatively cancels.

Consumers alleged that Affinion charged them for services without authorization or knowledge.  Attorney General Kane said that some consumers were even confused about who Affinion was since offers looked like they came from Affinion's marketing partners, which typically were banks or retailers with whom consumers had an existing business relationship.

According to the investigation, Affinion engaged in marketing practices that misled consumers and failed to clearly disclose their identity. Affinion also used "live checks," where consumers were sent an offer that included an actual check via direct mail. However, when consumers endorsed and deposited the checks, they were unknowingly authorizing their enrollment in membership programs, for which Affinion billed monthly.

Affinion also conducted online data pass offers, which presented consumers an immediate offer 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 retailer would share that information.

Attorney General Kane said that today's settlement against Affinion prohibits both practices. The agreement also includes further changes to Affinion's business model by requiring the company to provide clear and conspicuous information to consumers after enrollment regarding their membership and changes to cancellation practices.

A complete list of Affinion's membership programs are available here.

Attorney General Kane encouraged consumers to check their credit card and bank account statements for the names of Affinion's membership programs.

Consumers who believe they were improperly charged by Affinion, Trilegiant or Webloyalty can file consumer complaints with the Attorney General's Bureau of Consumer Protection by visiting www.attorneygeneral.gov or by calling 1-800-441-2555.

Pennsylvania was joined in the settlement by the Attorneys General from Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming.

The Commonwealth's case was handled by Senior Deputy Attorney General Amy Schulman of the Attorney General's Bureau of Consumer Protection.