McKenna settlement funds bound for Wash. general fund

Keith Loria Feb. 3, 2011, 5:00am

SEATTLE (Legal Newsline) - Washington Attorney General Rob McKenna announced on Wednesday that his office has reached a $1.3 million settlement with a company that allegedly engaged in deceptive marketing tactics.

Intelius allegedly used websites to enroll consumers in unauthorized membership programs. McKenna alleged that the company used the illegal internet sales method of post-transaction marketing, where additional services are offered to consumers after they've submitted their credit card data but before they've received the product they intended to purchase.

McKenna also alleged that Intelius received thousands of complaints and continued its deceptiveness even though it was alerted to the problems. The suit further alleged that company CEO Naveen Jain was aware of the complaints.

As part of the settlement, $772,320.33 will be given to the state general fund with the remainder earmarked for litigation costs and refunding Washington consumers who were allegedly improperly enrolled in the company's "Identity Protect" program.

"As the governor and state legislature scrutinize every spending priority in an effort to balance the state budget, I'm proud my Consumer Protection Division was able to contribute more than three-quarters of a million dollars as part of this settlement," McKenna said.

"While $772,000 is only a fraction of the funds needed to balance the budget, it's enough to make a real difference when it comes to making our communities safer or providing services for our most vulnerable."

The settlement requires Intelius to significantly restrict its future advertising policies. The company is also prohibited from accepting advertising from Vertrue Inc., WebLoyalty Inc., and Affinion.

Furthemore, consumers must understand clearly the agreement before being enrolled in any membership program with the company.

"To put this into perspective, these funds would be enough to fund the new criminal sentencing enhancements for street gang leaders my office was seeking-two times over," McKenna said. "It could also go a long way in funding prevention programs in our communities."

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