Oregon joins in big ‘discount club’ settlement

Oregon Attorney General Ellen Rosenblum announced Tuesday that Stamford, Conn.-based Affinion, and its subsidiaries Trilegiant and Webloyalty, will pay over $30 million to settle allegations they misled consumers into signing up and paying for discount clubs and membership.

The $30 million will be split among 47 states, the District of Columbia and consumers. Oregon will receive more than $700,000. Part of the money – more than $19 million – will help provide refunds to certain consumers.

Oregonians who believe they were improperly charged by Affinion, Trilegiant or Webloyalty should file complaints with the Oregon Department of Justice by calling the consumer hotline at 1-877-877-9392 or filing a complaint at www.oregonconsumer.gov

The multi-state action was led by Oregon and eight other states.

Affinion and its related companies run multiple discount clubs and membership programs offering a variety of services such as credit monitoring, roadside assistance, and discounted travel.

Affinion markets these programs through a series of banks, retailers and other marketing partners. Consumers are often presented these program and services immediately after engaging in a transaction with one of these marketing partners.

Affinion charges a monthly fee to consumers for these services, which continues until the consumers affirmatively cancel. Consumers allege the company charged them for services without their authorization or knowledge.

Once charged, consumers reported it was difficult to cancel or to get a refund. Other consumers were confused about what Affinion even was. They thought they were doing business with the marketing partner they were familiar with.

Rosenblum reminded consumers that it’s essential they read their credit card bills and bank statements carefully.

“Negative option schemes like this take special advantage of people who don’t pay close attention,” Rosenblum said. “Sadly, you might discover you are being billed $15 a month for something you had no idea you had signed up for!”

Affinion’s so-called live checks and online data pass solicitations were of particular interest during the investigation. In live check, consumers were sent via direct mail what appeared to some of them to be a check. But when they endorsed and deposited the checks, the consumers unknowingly authorized Affinion to enroll them in membership programs.

In online data pass, consumers were presented an Affinion offer immediately after an online purchase. Affinion was then able to enroll and bill consumers without acquiring any of their account information because the information would pass from the marketing partner to Affinion. As part of Tuesday’s settlement, both practices are prohibited.

Affinion and its subsidiaries deny any wrongdoing.

The agreement requires further changes to Affinion’s business model so that it provides clear and conspicuous information to consumers regarding their membership, periodic reminders of their enrollments, and changes to Affinion’s cancellation practices.

Attorney General Rosenblum urges Oregonians to check their credit card and bank account statements for charges from one of Affinion’s membership program partners. Click on this link for a list of Affinion’s marketing partners: http://www.doj.state.or.us/releases/pdf/affinion_membership_program_list.pdf

The complete settlement terms and refund eligibility can be found here: http://www.doj.state.or.us/releases/pdf/affinion_judgment.pdf