Discount Club Settles Raft of State Actions
WASHINGTON (CN) - Affinion will pay $30 million in consumer refunds and penalties to settle federal complaints filed by 46 states and the District of Columbia, attorneys general said.
The announcement came alongside filings that accused Affinion of tricking consumers into joining discount clubs and paying for such memberships.
Connecticut-based Affinion and its subsidiaries Trilegiant and Webloyalty had been the subject of class actions in the past. They run various discount clubs and membership programs that provide consumers with credit monitoring, roadside assistance, discounted travel and other such services.
The complaints said Affinion has well-known banks and retailers market its clubs and memberships to consumers immediately after a transaction.
Consumers apparently complained en masse that Affinion charged them a monthly fee of $8 to $15.99 without their authorization or knowledge.
Some reported trouble canceling the subscription or getting a refund, the complaints stated.
Affinion agreed Thursday to pay $30 million in consumer refunds and penalties.
Refunds will be eligible to consumers who believe Affinion charged them improperly.
Affinion will also begin providing "clear and conspicuous information to consumers about its memberships, give them periodic reminders of their enrollment, and make it easier to cancel," a statement from the North Carolina attorney general said.
That statement noted Affinion will also be barred from one of its most "troubling" practices: sending consumers what appeared to be checks in the mail.
"When consumers endorsed and deposited the checks, they unknowingly authorized Affinion to enroll them in membership programs and bill them each month," the statement continues. "Consumers who shopped online were presented an offer from Affinion immediately after making a purchase. Affinion then enrolled and billed them for services using account and contact information shared by the retailer.