Class Claims Company Store Crams Customers

LOS ANGELES (CN) - In a federal class action, irate customers claim The Company Store sends confidential financial information to a marketing group that charges them $99 a year for a "Buyers Edge" program the customers don't want and didn't even know exists.

Lead plaintiff Alexandra Kondracke sued the Company Story Factory, its corporate parent Hanover Direct, and United Marketing Group for consumer law violations, unfair competition and breach of contract.

She claims the defendants "automatically enroll and charge each consumer for membership in Buyers Edge at the recurring yearly rate of $99" though the customers "are entirely unaware they have been made part of the program or what the program even provides."

Kondracke claims she "contacted the Company Store by telephone to place an order for consumer merchandise. In doing so, plaintiff provided her credit card and other confidential information to a representative of the Company Store for the sole purpose of charging her credit card for the merchandise and delivery of same. However, unknown to plaintiff, after submitting this highly sensitive information, the Company Store and its parent corporation, Hanover Direct, transmitted her name, address and other confidential information to defendant UMG. Thereafter, the Company Store and Hanover Direct caused a $99 charge to be applied to plaintiff's credit card account on two separate occasions."

"The $99 was a yearly "membership fee" in Buyers Edge, a "rewards" program that "purports to provide various discounts and benefits applicable to a variety of companies with which UMG contracts. However, the overwhelming majority of consumers 'enrolled' by defendants in Buyers Edge are entirely unaware they have been made part of the program or what the program even provides. These consumers are repeatedly charged for Buyers Edge and get nothing in return," according to the complaint.

Kondracke claims that when she "stated she did not want Buyers Edge, the Company Store representative stated that the purchase could not be completed until [she] accepted the free trial. The Company Store representative stated that Buyers Edge could be canceled without charge by calling the toll free number, which would be listed on the materials shipped with plaintiff's merchandise."

But upon receiving her order, "plaintiff discovered that the package did not contain any information about Buyers Edge or how to cancel the free trial. Plaintiff recalls receiving no other material from any of the defendants describing what Buyers Edge is or how to use it," Kondracke says in the complaint.

The complaint cites 10 other complaints that angry customers have posted on the Internet, which "detail defendants' modus operandi with respect to Buyers Edge. With easy access to consumers' confidential information, including their name, address, telephone number, and credit card or debit card account data, with little or no disclosure of the terms of the program, and with no authorization, defendants cram charges onto the consumers' credit card or debit card accounts for Buyers Edge. While some of these consumers received (or were promised) refunds or partial refunds for Buyers Edge, thousands of other consumers have not." (Parentheses in complaint.)

The complaint claims the scam works like this: After buying something from Hanover Direct and/or The Company Store, "confidential information regarding plaintiff and the classes [was sent] to UMG, which enrolled them in a 'trial' membership program. After an approximately thirty-day waiting period, during which plaintiff and the classes were unaware they were enrolled in Buyers Edge, defendants charged plaintiff and the classes' credit cards or debit cards $99, on one or more occasions.

"In all instances, Buyers Edge is wholly unrelated to the retail transaction contemplated by plaintiff and the classes. Yet, for each person enrolled in Buyers Edge, each receives a share of the charge and thereby profits from each unauthorized charge.

"Because consumers are unaware that they are being enrolled in Buyers Edge, are unaware that their credit card or debit card will be automatically charged for Buyers Edge in perpetuity, and because the description and amount charged to the accounts by defendants are deceptive, consumers often do not discover theses charges on their credit card or debit card statements."

Kondracke seeks punitive damages for the class.

She is represented by Daniel Germain, with Rosman and Germain, of Encino.

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