Repeat violator Trilegiant to pay $300,000 to Iowa, refund consumersStaff Writer | August 15, 2016
A Connecticut-based marketing company that has been the target of previous consumer fraud enforcement actions will pay $300,000 to the state.
Marketing Trilegiant Corporation will stop telemarketing
The consent judgment, filed in Polk County District Court, follows Trilegiant Corporation’s violation of a 2013 “assurance of voluntary compliance” agreement with the Consumer Protection Division, in which the company committed to comply with the law.
Among other requirements, the previous agreement compelled the company, when marketing buying club memberships to Iowans, to provide consumers with important disclosures mandated by state law.
According to Attorney General Tom Miller, a telemarketer working on Trilegiant’s behalf attempted to enroll an Iowa resident in the company’s “Great Fun” buying club membership by offering a flight booking discount in exchange for the consumer accepting the free trial membership.
However, Miller added, the representative did not provide the required legal disclosures.
Unbeknownst to the company, the consumer is an investigator in the Consumer Protection Division.
“The moment our investigator provided his Iowa address, the telemarketer should have stopped the membership sales pitch because it was missing the required disclosures,” Miller said.
“Incredibly, the telemarketer asked the Iowan to come up with a mailing address in another state, to close the unlawful sale under the guise that it was outside of Iowa.”
When the Consumer Protection Division confronted Trilegiant about violating its previous agreement, Miller noted, the company initially claimed it was an isolated mistake and blamed it on one “rogue” telemarketer, which Miller alleges was blatantly false.
A subsequent investigation determined that all four of the telemarketing companies with which Trilegiant had contracted to pitch its memberships repeatedly engaged in the same subterfuge and deception, unlawfully and fraudulently enrolling and charging hundreds of Iowans while making it appear that they lived in other states.
Trilegiant and its parent company, Affinion, have been the targets of repeated civil law enforcement actions involving nearly all states, and federal authorities, at least since 2005.
In 2013, a consent judgment with 47 states, including Iowa, required Trilegiant to end its abusive practice of sending consumers checks which, if cashed or deposited, automatically enrolled them in a buying club that charged their credit cards indefinitely.
Last year, Affinion was ordered to provide $6.8 million in consumer refunds and pay the Consumer Financial Protection Bureau a $1.9 million penalty, for unfairly charging consumers for credit card add-on benefits they did not receive.
“Because of Trilegiant’s track record of violating consumer laws here and elsewhere, this time our office sought a stringent court order that a judge can enforce through contempt of court sanctions,” Miller said.
“In addition, this judgment requires an additional $500,000 payment if the company violates the latest consent judgment over the next three years.”
The consent judgment requires Trilegiant to identify and provide refunds to all Iowans drawn into the illegal memberships.
The company indicates that it has met that requirement by providing approximately $171,000 in refunds to about 2,500 Iowa consumers. ■