DES MOINES, Iowa (AP) -- A Connecticut-based company accused of tricking consumers into signing up for discount club memberships will pay Iowa consumers more than $5 million as part of a legal settlement, officials said Thursday.
Attorney General Tom Miller said the state will collect $6.2 million through an agreement with Affinion Group Inc. and its subsidiaries, Trilegiant Corporation and Webloyalty.com Inc.
"This is in my view a very significant settlement involving obviously a very significant amount of money," Miller said.
A chunk of the money is part of a written agreement with the Consumer Protection Division. The remaining amount is part of a $30 million national settlement with 47 states, including Iowa, and the District of Columbia. The state was allotted $800,000 in that settlement.
The written agreement includes more than $5 million for a special restitution fund, and the amount of money returned to consumers will depend on each individual case.
Affinion and its subsidiaries run discount clubs and membership programs that offer services like credit monitoring, roadside assistance and discounted travel. The company is accused of duping consumers into paying for them through supposedly "free trials."
Consumers claimed that the company charged them for services without their authorization or knowledge. The advertised benefits were also rarely used.
"It's a way to sort of trick people out of their money," Miller said during a news conference.
A message left for Affinion was not immediately returned Thursday.
Under the settlement terms, Affinion must provide consumers who enroll with clear information about their membership, periodic reminders about their enrollment and notice of changes to cancellation practices.
Vertrue Inc., another Connecticut-based marketing company, was ordered in July to pay $40 million in restitution and fines to Iowa consumers for the same allegations.
- Company Legal & Law Matters