TRENTON – Acting Attorney General John J. Hoffman announced Thursday that New Jersey will receive approximately $250,000 as a result of its participation in a multi-state settlement with Affinion, as well as its subsidiaries Trilegiant and Webloyalty, that resolves allegations the three companies misled consumers into signing up and paying for discount clubs and memberships
In addition to its quarter-million-dollar payout to the State, Affinion must also provide approximately $607,000 in direct restitution for New Jersey consumers. Overall, Affinion must pay a total of 45 states and the District of Columbia more than $30 million to settle the matter.
Affinion and its subsidiaries run multiple discount clubs and membership programs offering a variety of services such as credit monitoring, roadside assistance, and discounted travel. Affinion markets these programs through a series of agreements with “marketing partners” — well-known banks and retailers that present these programs to consumers, often immediately after the consumer has engaged in a transaction with that partner. Affinion’s programs are marketed via direct mail, online, telemarketing, and in face-to-face point of sale transactions. Affinion charges a monthly fee to consumers for these services, which continues until the consumers affirmatively cancel.
Consumer complaints about Affinion include that the company charged them for services without their authorization or knowledge. In some cases, consumers have complained that, once they learned they were being charged, they had trouble canceling or getting a refund.
Other consumers have said they were confused about who Affinion even was because the company’s offers appeared to have come from Affinion’s marketing partners – typically banks or retailers with whom they’d done business.
The States’ investigation uncovered several of Affinion’s marketing practices that misled consumers, including a lack of clear and conspicuous disclosure about Affinion’s identity, and the cost and ongoing nature of the charges.
Most troubling were two marketing practices by Affinion – live checks and the online data pass. In a live check solicitation, consumers were sent what appeared to be a check via direct mail. If consumers endorsed and deposited the check, they unknowingly “authorized” Affinion to enroll them in membership programs, and to bill them each month indefinitely
In an online data pass offer, consumers were presented an Affinion offer immediately after an online purchase from a retailer who was an Affinion marketing partner. Affinion was then able to enroll and bill consumers without acquiring any of their account information, because the marketing partner would pass that information to Affinion. As part of today’s judgment, both practices are prohibited.
The agreement announced Thursday will result in further changes to Affinion’s business model by requiring Affinion to provide clear and conspicuous information to consumers after enrollment regarding their membership, periodic reminders of their enrollment, and changes to Affinion’s cancellation practices.
Of the total of $30 million Affinion must pay the participating states, $19 million will go into a fund to provide refunds to some consumers who received unauthorized charges for Affinion’s programs.
Consumers who believe they were improperly charged by Affinion, Trilegiant, or Webloyalty can file complaints with the New Jersey Division of Consumer Affairs at www.njconsumeraffairs.gov/comp.htm or by calling 973-504-6200.
Consumers checking their credit card and bank account statements should also be looking for the names of Affinion’s membership programs, as that is how the company’s charges may appear on their bills. Affinion’s membership programs are listed on www.trilegiant.com and www.webloyalty.com.