SEATTLE – Attorney General Rob McKenna today announced a $14.5 million settlement with Chase Bank and Trilegiant Corp. that resolves allegations the companies unlawfully deceived consumers into paying for memberships for programs that purportedly provided discounts for certain goods and services. The money will be shared by 15 states. Approximately 3,000 Washington consumers may be eligible for refunds.
“Consumers must give their informed consent before obligating themselves to purchase products and services,” McKenna said. “Chase and Trilegiant solicited consumers with offers of ‘free’ trials in membership programs. Many of these solicitations were checks for $2 to $10 that resembled a customer refund or rebate. But by cashing the check, a customer supposedly agreed to enroll in one of Trilegiant’s many programs. Consumers who failed to cancel by a specific date were charged membership fees on their Chase credit or loan statements.”
The settlement will be filed today in Thurston County Superior Court and courts in 14 other participating states. Trilegiant and Chase also will pay nearly $6.2 million to the settling states to cover civil penalties and recoup of attorneys’ costs and fees. Washington state will receive $75,000 from each of the two companies. Chase Home Finance and TRL Group, Inc., are also named as defendants in the settlement.
The agreement also requires Trilegiant to pay more than $8.3 million in restitution to consumers who request refunds for membership fees. Washington consumers may share nearly $500,000 in restitution, although the exact amount depends on how many people in participating states request refunds and are determined eligible. Washington is home to approximately 6 percent of the total number of consumers who purchased memberships and live in participating states.
Trilegiant must also send renewal notices to consumers who have active memberships advising them that they have purchased the membership and providing information about how to cancel.
The states alleged consumers did not realize the solicitations were sent by Trilegiant because they were usually included in consumers’ mortgage or credit card statements or mailings with Chase’s logo on the envelope and letterhead. Chase allegedly reviewed and approved marketing materials used by Trilegiant.
Consumers who cashed the checks, thinking they were rewards or refunds, were enrolled in programs such as AutoVantage Gold Service, Buyers Advantage Service, CompleteHome Service, Just for Me, Pet Privileges Service, Shoppers Advantage Service, Identity Safe Service and Travelers Advantage Service. Many consumers belatedly discovered they had unwittingly purchased memberships in several different clubs, according to the states’ complaint.
The settlement requires Trilegiant and Chase to reform their business practices. Trilegiant or any other that solicits Chase customers for membership must clearly disclose all terms of any “free trial”, including when customers will be billed and how they may cancel. The companies are prohibited from identifying a solicitation as a “reward” or “rebate” offer, using checks to enroll customers into a program or for any other reason other than a benefit or incentive.
In addition to Washington, states participating in the settlement include Alaska, California, Connecticut, Illinois, Iowa, Maine, Michigan, Missouri, New Jersey, North Carolina, Oregon, Pennsylvania, Tennessee and Vermont. Louisiana and Ohio also announced settlements with Trilegiant.
Washington state residents are eligible for restitution under the settlement if they who signed up for membership in a Trilegiant club through any bank or other company they did business with and were first charged membership fees on or after July 1, 2001.
Consumers must file a written complaint with the Attorney General’s Office within nine months. Complaints can be filed online at www.atg.wa.gov or downloaded from the Web site. Call 1-800-551-4636 to request a form by mail or receive additional information.
All consumers who have already filed complaints will receive full restitution. If there are not enough funds to make full restitution to all consumers who complain, then those consumers who file complaints before the deadline months will receive a share of the remaining restitution dollars.
Membership programs sold by Trilegiant included, but were not limited to:
- AutoVantage Gold Service
- Buyers Advantage Service
- CardSecure for Small Business Service
- Cheap Tickets Gold
- Clever Clubhouse Service
- CompleteHome Service
- Credit Card Guardian Service
- Deals and Destinations
- Digital Protection Plus Service
- Elite Excursions
- Enhanced Hotline Service
- Enhanced Privacy Guard Service
- Event Privileges Service
- Everyday Values Service
- EverydayValues Gold
- Everyday Privileges Gold
- Great Fun Service
- Great Options Service
- HealthSaver Service
- HealthSaver Prescription Plus
- Hotline Service
- Identity Safe Service
- IdentitySecure Service
- Just for Me Service
- National Card Registry Service
- National Home Protection Service
- Pet Privileges Service
- Privacy Guard Service
- ProfitPower Service
- PrivacySource Service
- Shoppers Advantage Service
- Small Business Central Service
- Successful Investing and Money Management Service
- Total Purchase Protection
- Travelers Advantage Service
- Travel ER Service
If you are unsure whether you purchased a membership program, carefully examine your credit card and mortgage statements and monitor your mail for notices from Trilegiant. Consumers can also contract Trilegiant electronically via the company’s Web site at www.trilegiant.com or by mail at Trilegiant Corporation, 100 Connecticut Avenue, Norwalk, CT 06850, attn: K. Buonagurato. Consumers outside Washington should contact the Attorney General’s Office in their state.
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Media Contacts: Kristin Alexander, Public Information Officer, (206) 464-6432
David Huey, Assistant Attorney General, (253) 593-5057