Webloyalty and Affinion/Trilegiant Settlements
In August 2010, Attorney General Cuomo announced an $8 million settlement with Affinion Group, Inc. and its subsidiary Trilegiant Corporation (together "Affinion/Trilegiant"), including a $5 million restitution fund to provide refunds to New York consumers who were billed for discount club programs without their knowing consent, and $3 million in penalties, costs, and fees. Affinion/Trilegiant will replenish the restitution fund as needed to ensure full refunds to all eligible New York consumers.
In September 2010, Attorney General Cuomo announced a settlement with Webloyalty in Webloyalty would pay $5.2 million in penalties, costs and fees and would also provide refunds to New York consumers who unknowingly enrolled in or did not authorize billing for Webloyalty discount clubs and programs.
How the schemes worked:
Membership program sellers entered into arrangements with well-known companies ("partner companies") to provide discounts, rebates, or other incentive offers, either through online solicitations or by sending checks by mail ("live checks") to customers of their partner companies during or following the customers' transactions with those partner companies. When a consumer accepted an online offer or cashed a live check, the membership program seller would obtain the consumer's credit or debit card account information from the partner company. After a "free trial" period, the membership program seller would begin to charge the consumer's credit or debit card periodically until the consumer canceled the membership.
- CLICK HERE FOR AN EXAMPLE OF A "LIVE CHECK"
- CLICK HERE FOR AN EXAMPLE OF AN ONLINE SOLICITATION
- CLICK HERE FOR AN EXAMPLE OF AN ONLINE ENROLLMENT PAGE
The Attorney General's Findings
The Attorney General's investigation revealed that Affinion/Trilegiant's online and check solicitations and Webloyalty's online solicitations fostered the false impression that the incentive offer or check was provided as a reward or rebate from the familiar merchant, mortgage company or bank with whom the consumer had transacted. In addition, because consumers were not required to provide their credit or debit card as part of the enrollment process, many consumers who allegedly accepted the online offer or cashed the live check did not understand that by doing that they were enrolling in a membership program for which they would be charged if they failed to cancel during a trial period.
Affinion/Trilegiant's online marketing has involved arrangements with well-known retailers such as Classmates Online, Inc., 1-800 Flowers.com, and Hotwire.com, and its check solicitation marketing has involved arrangements with companies including Budget, People Finder, Red Cats, Ocwen Mortgage, and HSBC.
Webloyalty's online marketing has involved arrangements with well-known retailers such as Orbitz, Ticketmaster, Shutterfly, MovieTickets.com and Pizza Hut.
Affinion/Trilegiant membership programs include:
- Buyers Advantage
- Everyday Privileges
- Everyday Values
- Great Fun
- Great Options
- Just For Me
- Privacy Guard
- Shoppers Advantage
- Travelers Advantage
Webloyalty membership programs include:
- Reservation Rewards
- Shopper Discounts and Rewards
- Complete Savings
Under the settlement with the Attorney General, Affinion/Trilegiant and Webloyalty must fully refund fees charged to consumers who did not knowingly enroll in membership programs or who did not knowingly authorize billing for enrollment in the programs. The Attorney General also obtained settlements with many of the companies that partnered with Affinion/Trilegiant and Webloyalty. The settlements require the companies to reform their marketing practices and permanently end the practice of providing consumers' billing information to companies that market discount clubs online. The settlements also require the partner companies to contribute money to a fund that will pay for consumer education, refunds, and the costs of the investigation.
Most consumers who were currently enrolled in and being charged for one of the listed Affinion/Trilegiant programs as of September 9, 2010, should already have received notice of the settlement and a claim form. Any consumer who discovers they were charged for one of these programs without their knowing consent and who did not receive a claim form should call Affinion/Trilegiant at the 1-800 number listed with the charge on their account statement to cancel the membership and receive a refund.
Consumers who are being charged for a Webloyalty program will be receiving notice of the settlement and claim forms over the next several weeks. Any consumer who discovers they were charged for one of these programs without their knowing consent and who does not receive a claim form should call Webloyalty at the 1-800 number listed with the charge on their account statement to cancel the membership and receive a refund.
What Consumers Can Do to Protect Themselves Against Unauthorized Charges:
Consumers should carefully review their credit and debit account statements each month to ensure that all charges have been authorized. Consumers who discover unauthorized charges from membership program sellers other than Affinion/Trilegiant and Webloyalty, such as Vertrue (which would appear on account statement as "AP9" or "MVQ" or the full name of a program such as "Privacy Matters 1-2-3," "Passport to Fun" or "Shoppers Essentials"), should call the 1-800 number listed with the charge on their account statement to cancel their membership and/or request a refund. Consumers should also visit www.ag.ny.gov for updated information on the settlements and the Office's continuing investigations, and may also contact the Attorney General’s Office at 1-800-771-7755.
Consumers should also carefully read the fine print provided with any discount or service offers, particularly when shopping online. Consumers also should not cash unsolicited checks that come in the mail without carefully reading any fine print that appears on the front or back of the check, as well as any materials that accompany the check. In many cases, such discount offers and checks come with significant strings attached.