Classmates.com, FTD pay to settle deceptive billing case
Classmates Inc. and Florists' Transworld Delivery agreed to pay a combined $11 million to 22 states, including Illinois, to settle alleged violations of consumer-protection laws.
Attorney General Lisa Madigan announced the settlement today with the attorney generals of the other states involved, according to a news release from her office.
Classmates, a social networking service that helps its paid members reconnect with former classmates, and Florists, a flower delivery company that operates through FTD.com, allowed third-party marketers to charge their customers for goods or services they did not want, Madigan and her counterparts alleged.
“These companies' practices were deceptive,” Madigan said in a news release. “After customers made a purchase, they were also charged for goods and services they never requested or wanted.”
The marketers would offer programs such as travel rewards and bill the consumers unless they actively canceled the service or product delivery. Classmates and Florists allegedly shared customer information such as billing information that allowed the marketers to engage in those practices. Federal law bans that type of information sharing.
Classmates also was accused of failing to inform users that their subscriptions would automatically renew, and made cancellation difficult.
Florists and Classmates denied the allegations but agreed to pay a combined $8 million. Illinois' share is nearly $490,000.
Classmates is establishing a $3 million fund that will provide refunds to customers who had difficulty canceling subscriptions or unwillingly subscribed. It also agreed to make it easier to cancel subscriptions and more clearly state that subscriptions will be automatically renewed.
Today's agreement included terms that will prevent further injustices surrounding deceptive billing and other consumer-protection injustices.
Customers seeking refunds from Classmates have 90 days to call Madigan's Consumer Fraud Hotline.
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