AG Madigan alleges marketing firm 'crams' credit cards
Lisa Madigan (D)
CHICAGO (Legal Newsline) - An Evanston, Ill.-based online marketing firm is the subject of a lawsuit filed today by Illinois Attorney General Lisa Madigan.
Peel Inc. and its president Brian Dale, are alleged to have engaged in the process of "cramming" consumers' credit cards with unauthorized charges for purported "free trial" offers for a host of products, including jewelry, posters and coffee.
"We've received an extraordinary number of complaints from consumers who believed they were signing up for free items but wound up with unauthorized charges from this company," Madigan said. "Because of cases like this, it's important that consumers carefully review their monthly credit card statements to ensure they're not being unexpectedly billed."
More than 2,300 complaints have been made against Peel and its affiliated Web sites to Madigan's Consumer Fraud Bureau and the Better Business Bureau.
Madigan's complaint alleges that the defendants use dozens of Web sites to sell their products online, including seattlecoffeedirect.com, metroroasters.com, posterpass.com and shopdani.com.
The company's products are marketed as "free trial" offers that require consumers to provide their billing information. The billing information, the company professes, is to cover shipping and handling fees for the so-called free merchandise.
Within days of signing up for a free trial, however, unauthorized charges begin showing up on consumers' credit cards ranging from $19.99 to $49.99.
Madigan's complaint also alleges that if a consumer is able to reach Peel's customer service, they are allegedly told that the charges will stop. The unauthorized charges, however, continue.
According to the lawsuit, the defendants actions are in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. The suit seeks a permanent injunction to bar the defendants from doing business in Illinois, restitution for consumers, civil penalties of $50,000 for violating the Consumer Fraud Act and an additional $50,000 for each violation committed with the intent to defraud.