North Carolina Department of Justice
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Cooper wins settlement with Chase Bank, Trilegiant

Release date: 12/11/2006

Raleigh: Attorney General Roy Cooper today announced a $14.5 million, 15-state settlement with Chase Bank and Trilegiant Corporation to resolve allegations that the companies unlawfully deceived consumers into paying for discount membership programs.

“Consumers deserve to know exactly what they’re buying and how much it costs,” said Cooper. “In this case, too many consumers got tricked into an expensive long-term membership they didn’t even want. Thanks to this agreement, people can get their money back.”

Trilegiant signed up consumers for its membership programs through checks included with Chase Bank’s credit card and mortgage loan statements. Consumers who cashed the $2 to $10 checks unwittingly enrolled in membership programs such as travel, auto repair and buying clubs. Although Trilegiant claimed the offer was for a free trial membership, consumers were charged repeatedly until they took steps to cancel. Trilegiant automatically billed consumers’ Chase credit card or loan statement on either a monthly or yearly basis, depending on the membership program, for $80 to $90 a year.

Trilegiant’s membership programs include 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 requires Trilegiant to pay a combined $8.325 million in refunds to all consumers in 15 states including North Carolina. Eligible North Carolina consumers who have already complained to Trilegiant or to Cooper’s office, or who complain in writing within the next nine months, can seek a refund. In addition, Trilegiant and Chase will each pay $75,000 to the state.

Consumers who signed up for membership in a Trilegiant club through any bank or other business and who were first charged membership fees on or after July 1, 2001 are eligible for refunds. Trilegiant is also required to send renewal notices to consumers with memberships to let them know how to cancel.

Consumers who are trying to find out if they unknowingly paid for a membership program should examine their credit card or mortgage statements and monitor their mail for any notices from Trilegiant. They can also contact Trilegiant electronically via Trilegiant’s internet website, or by mail at Trilegiant Corporation, 100 Connecticut Avenue, Norwalk, CT 06850, ATTN: K. Buonagurato.

NC Department of Justice y 9001 Mail Service Center Raleigh, NC 27699-9001 y (919) 716-6400

Chase and Trilegiant entered agreements that allowed Trilegiant to market its program to Chase customers. Trilegiant used Chase’s name, and Chase reviewed and approved marketing materials used by Trilegiant. To protect consumers from future deceptive pitches, Trilegiant and Chase are required to reform their business practices and forbidden to use deceptive marketing of membership programs.

Chase is a national bank and entered into this settlement despite efforts by the Office of the Comptroller of the Currency, the federal regulator of national banks, to keep state attorneys general from enforcing laws that protect consumers from national banks. Cooper has been a leader in challenging the OCC.

“Washington has tried to take 50 cops off the consumer beat, but this agreement shows that states will keep enforcing the law when consumers are harmed by national banks,” Cooper said.

In addition to North Carolina, the Attorneys General in the following states joined the settlement: Alaska, California, Connecticut, Illinois, Iowa, Maine, Michigan, Missouri, New Jersey, Oregon, Pennsylvania, Tennessee, Vermont and Washington. Louisiana also announced a separate settlement with Trilegiant.