Iowa AG Sues Trilegiant Buying Club

Iowa Attorney General filed a consumer fraud lawsuit against Trilegiant Corporation, alleging that the company unfairly and deceptively charged Iowans for memberships in discount buying clubs or other programs, in many cases without consumers' knowledge.

According to the lawsuit, Trilegiant, a Delaware Corporation under the Affinion Group, Inc., since at least 2001, enrolled Iowans in "memberships" for programs that offer savings on products and services such as home improvement purchases, health products, and entertainment expenses.

The lawsuit further alleges that many Iowans whose credit cards are charged periodically by the defendants are unaware that they are members of the defendants' buying clubs, and would object to these unwanted and/or unauthorized charges if made aware of them. According to the lawsuit, the memberships typically involve an elusive premium used to lure the consumer in, and an allegedly "risk-free" trial period followed by charges to a consumer's credit card, bank account, or other financial account if the consumer fails to cancel. These membership charges may appear under one of more than two dozen names, such as "Buyers Advantage," "Everyday Values," or "Shoppers Advantage."

The lawsuit, filed in Polk County District Court, alleges that Trilegiant violated Iowa's Buying Club Memberships Act and Iowa's Consumer Fraud Act. The lawsuit seeks a civil penalty of up to $40,000 for each separate violation of law, in addition to unspecified monetary judgments. The lawsuit also alleges that many Consumer Fraud Act violations were committed against older people and qualify for additional civil penalties provided by Iowa law.

The Iowa Buying Club Memberships law requires covered memberships to be sold through written contracts that expressly notify the customer of a three-day right to cancel, and that require the customer's signature. Membership buyers also must be provided "Notice of Cancellation" forms that they can use to cancel the transaction within three business days, and avoid any obligation.

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