DES MOINES, Iowa (Legal Newsline) - Iowa Attorney General Tom Miller announced a $252,167.42 agreement Friday with a California-based online company to resolve allegations that it enrolled unknowing Iowans in a membership program.
The Active Network Inc., a San Diego-based company that operates Active.com, allegedly enrolled more than 9,500 Iowans in a $59.95 annual membership program without their knowledge.
"We allege that when many consumers registered online for a sports-related activity like a marathon, a 5K run, or even a soccer camp or little league, the company enrolled them as members of the 'Active Advantage' membership program," Miller said. "The company charged an annual $59.95 membership fee, which showed up on credit card or bank statements."
The membership was a negative option agreement, which meant that unknowing members who did not challenge the charge allegedly continued to be billed every year.
"Some consumers complained that they did not know they had been enrolled, and unwittingly paid hundreds of dollars over the course of several years for a membership they didn't want and didn't use," Miller said.
Consumers were allegedly enrolled in the program when clicking a button to claim a rebate or a free thank you gift when registering online. By claiming the rebate or gift, consumers were allegedly subject to undisclosed enrollment and membership charges.
Under the terms of the agreement, The Active Network will pay $237,167.42 in refunds to Iowans and $15,000 to the state for consumer fraud enforcement. The Active Network denied liability as part of the agreement.
Iowa AG announces agreement with California online merchant
