Cox Announces Multistate Settlements with
Trilegiant Corporation and Chase Bank
Rusty Hills, Media Contact 517-373-8060 Agency:
December 11, 2006
Attorney General Mike Cox today announced a $14.5 million, 16-state settlement
with Trilegiant Corporation and Chase Bank that resolves allegations that the
companies misled consumers into paying for membership programs that purported to
provide consumers with discounts on auto and home repairs, shopping, and other
goods and services. Michigan will receive $150,000 from Trilegiant and Chase as
part of the settlement agreement.
"Misleading customers into
purchasing unwanted services is unacceptable," said Cox. "My office will work
vigilantly to ensure that customers are provided with information that fully
discloses the costs and fees associated with memberships and solicitations."
resolve claims by the Attorneys General that Trilegiant solicited consumers with
offers of "free" trial membership programs without adequately informing
consumers they would be automatically charged for these services if they did not
affirmatively cancel within a specified period of time. The solicitations often
included a check for between $2 and $10 which many consumers mistook for rebates
or rewards. When cashed, however, the checks purported to create an ongoing
payment agreement for the membership program after the free trial offer ended.
Through an agreement with Chase, Trilegiant was provided access to Chase
customers for the purpose of marketing the membership programs. Solicitations
were often included in Chase mortgage or credit card statements, which prevented
consumers from realizing the solicitations were in fact from Trilegiant.
Because program charges were automatically billed to consumers credit cards or
loan statements absent affirmative cancellation within a required time period,
many consumers did not discover that they had purchased memberships until the
charges appeared. Trilegiant membership product names include, but are not
limited to, AutoVantage Gold Service, AutoVantage Service, Buyers Advantage
Service, CompleteHome Service, Just for Me, Pet Privileges Service, Shoppers
Advantage Service, and Travelers Advantage Service.
Today's settlement with
Trilegiant requires the company to pay a combined $8.325 million in restitution
to all consumers in Michigan and the 15 other settling states who have already
complained to Trilegiant or their Attorney General, or who complain in writing
within the next nine months. Of the states that settled with Trilegiant and
Chase, approximately seven percent of the consumers charged for memberships live
in Michigan. By separate settlement agreements, Trilegiant and Chase will also
pay $6.175 million to the states for their costs and fees. The State of
Michigan will receive a total of $150,000 from the companies.
To protect consumers from
being misled in the future, the settlements require reforms of Trilegiant's and
Chase's business practices. Future solicitations sent by Trilegiant, or any
other company that solicits Chase customers in a similar manner, must clearly
disclose all the terms of any "free trial," including when and how the customer
will be billed for any membership, and how to cancel a membership.
Additionally, the settlement forbids Chase and Trilegiant from engaging in any
deceptive conduct in the marketing of membership programs. The prohibited
practices include identifying a solicitation as a "reward" or "rebate" offer.
Any checks or other premiums offered as part of a solicitation must be
advertised as an incentive for the purchase of a membership.
Consumers who signed up
for membership in a Trilegiant club through solicitations from any bank or other
company and who were first charged membership fees on or after July 1, 2001, are
eligible to receive restitution. Additionally, Trilegiant is required to send
renewal notices to consumers who have active memberships advising them that they
have purchased memberships and how to cancel if they wish.
In addition to Michigan,
Attorneys General from the following states joined today's settlements: Alaska,
California, Connecticut, Illinois, Iowa, Maine, Missouri, New Jersey, North
Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Vermont, and Washington.
Complete terms of the settlement agreement ("Assurance of Discontinuance") as
well as a Consumer Alert with information on how to dispute unauthorized credit
card charges are available on the Attorney General's Web site, http://www.michigan.gov/ag.
Consumers who wish to
discover whether they may have unknowingly paid for a membership program should
carefully examine their credit card and mortgage statements and should also
monitor their mail for any notices from Trilegiant. They may also contact
Trilegiant via the company's Web site, http://www.trilegiant.com,
or by writing to Trilegiant Corporation, 100 Connecticut Avenue, Norwalk, CT
06850, ATTN: K. Buonagurato. Complaints requesting restitution for unauthorized
charges may be submitted to the Attorney General's Consumer Protection Division
online at http://www.michigan.gov/ag
or by writing to the Consumer Protection Division, P.O. Box 30213, Lansing, MI
Concluded Cox, "Billing
practices should always be fully transparent. Today's settlement is truly a win
in protecting the rights of Michigan consumers."
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