Michigan's Attorney General Bill Schuette has announced $8 million in refunds for consumers in our state and 21 others.
The settlement involved charges of misleading advertising and billing practices. The companies involved are Classmates, Inc., Florists' Transworld Delivery, and FTD.com Inc. Michigan will receive $412,620 as part of the settlement.
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The Attorney General's office says Classmates.com is a social networking site and FTD.com is a floral delivery service. The investigation alleges Classmates and FTD engaged in misleading, unfair and deceptive practices in violation of state consumer protection laws. Specifically, the state claims
the companies used "negative option" marketing practices to sell membership programs to consumers.
"Negative-option marketing" is a sale practice where a seller treats a consumer's failure to take action, either to reject or cancel an agreement as assent to be charged for goods and services. Using third-party marketers, the companies sold customers programs such as discount buying clubs and travel rewards programs.
The Attorney General's office says unbeknownst to the consumer, Classmates and FTD would share consumers' personal information, including credit card account numbers (a practice known as "data pass") so that the consumer could be billed for these offers if they did not cancel. Congress banned data pass in Internet transactions in 2010 with the passage of the 'Restore Online Shoppers Confidence Act.
"I am pleased that as a result of this settlement, we are better able to protect consumers from deceptive marketing and illegal data pass practices," said Schuette. "We will continue to aggressively pursue anyone seeking to skirt the rules at the expense of Michigan consumers and their hard-earned dollars."
If you did business with those companies and believe you may be impacted, you can find more information through this link.