Settlement worth $1.3M in Washington

Keith Loria Aug. 11, 2010, 4:20pm


SEATTLE (Legal Newsline) - Washington Attorney General Rob McKenna announced on Tuesday that he has reached a $1.3 million settlement with an online provider of background search services that allegedly engaged in illegal post-transaction marketing practices.

Intelius allegedly enrolled hundreds of thousands of consumers into membership programs without informing them it was being done.

McKenna alleges that the company received thousands of complaints about the unauthorized enrollments, but did nothing to stop them. Many in company management, including CEO Naveen Jain, allegedly knew about the complaints.

"Intelius chose cash over candor," McKenna said.

"Despite a continuous stream of complaints from consumers about mysterious charges, despite a consultant's belief that Intelius' advertising practices were causing confusion and despite a recommendation from its own staff to make it easier for consumers to opt out of additional purchases, the company wouldn't change course."

Intelius does not need to admit any wrongdoing under terms of the settlement but, in addition to the $1.3 million settlement, the company's advertising practices will be restricted in the future.

Intelius must also provide refunds to any Washington resident who was enrolled in its "Identity Protect" program who never used the service.

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