Miller: Company enrolled consumers in unauthorized clubs

Keith Loria Nov. 29, 2010, 3:11pm


DES MOINES, Iowa (Legal Newsline) - Iowa Attorney General Tom Miller announced on Wednesday that he has filed a lawsuit against a company that allegedly violated the state's Buying Club Memberships Act and Consumer Fraud Act.

The Norwalk, Conn.-based Trilegiant Corporation allegedly charged Iowans for memberships in discount buying clubs using deceptive measures. In many cases, consumers weren't even aware they were enrolled.

"We allege that a large number of Iowans were paying monthly fees for so-called memberships that they didn't approve, they didn't use and didn't ever want," Miller said.

Miller alleges that Trilegiant enrolled consumers in unauthorized memberships for programs that offered savings on products and services concerning home improvement purchases, health products and entertainment expenses.

More than 200 complaints were received by Miller's office after Iowans claimed their credit cards were periodically charged by the defendants for clubs most didn't know they were a part of.

The lawsuit alleges that the memberships typically involved an elusive premium used to lure the consumer in, and an alleged "risk-free" trial period.

Charges occur once that trial period ends if a consumer does not cancel the membership and are often listed on a bill under such names as "Buyers Advantage," "Everyday Values" or "Shoppers Advantage," Miller claims.

"Many consumers likely didn't realize what would result from accepting some sort of 'free trial' offer or other types of promotions," Miller said.

"What really happened, we allege, was Iowans paid time and time again for memberships they didn't know they had and never used."

Miller alleges that Trilegiant violated Iowa's Buying Club Memberships Act and Iowa's Consumer Fraud Act through its actions.

The lawsuit seeks a civil penalty of up to $40,000 for each separate violation of the law as well as other monetary judgments. The lawsuit also asks for harsher penalties for any acts committed against older people.

According to the Buying Club Memberships law, all covered memberships must be sold through written contracts that expressly notify the customer of a three-day right to cancel and require the customer's signature.

These buyers must also be provided with "Notice of Cancellation" forms that they can use to cancel the transaction within three business days to avoid any obligation.

In March, Miller won a similar case against Vertrue Inc., which allegedly used deceptive and unfair practices to market so-called buying club "memberships" to almost a half million Iowans, with revenues exceeding $36 million.

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