DES MOINES, Iowa (Legal Newsline) - Iowa Attorney General Tom Miller announced a $450,000 settlement on Wednesday with a Minneapolis-based buying club company that allegedly enrolled thousands of Iowans in membership programs without their knowledge.
Sempris LLC, and its predecessor companies Damark International Inc. and Provell Inc. allegedly offered Iowans a free gift card or other gift, which was tied to a trial membership. Sempris and its predecessors allegedly enrolled consumers who accepted the gift in a membership program, with or without the consumers' knowledge. The companies then allegedly charged the credit cards of consumers who did not step forward to cancel the membership.
"The roots of this settlement go back two decades," Miller said. "As early as 1993, our Consumer Protection Division heard from a lot of Iowans who complained that a Minnesota company called Damark charged them for memberships in which they had never intentionally enrolled."
Iowa law requires certain disclosures when consumers purchase buying club memberships. Miller alleged Sempris and its predecessors failed to make the disclosures when enrolling Iowans.
"If a membership operation follows our law, anyone getting enrolled has clear notice, and won't be ambushed later by unwanted credit card charges," Miller said.
Under the terms of an assurance of voluntary compliance, Sempris must pay $450,000 in refunds to consumers and comply with Iowa's consumer fraud and buying club laws when making future enrollments.
Sempris denied liability as part of the agreement.