(DES MOINES, Iowa) An Oregon-based buying club has agreed to pay more than $26,000 to Iowans and to the state, and has also agreed to change its marketing practices, following an investigation by the Attorney General’s Consumer Protection Division.
In an agreement called an “Assurance of Voluntary Compliance,” Platinum Online Group, Inc. of Portland, Oregon, which does business as Premier Membership Clubs, has agreed to pay more than $21,000 in refunds to Iowans who had been charged for memberships in the company’s programs. Platinum has also agreed to pay $5,000 to cover the state’s costs of investigation.
The company denied wrongdoing but agreed to change how it markets in Iowa. Platinum also agreed to cooperate in making partial refunds to about 370 Iowans who had been enrolled and charged for a “SavingPays Discount Club” membership.
“A Des Moines consumer alerted us to this illegal conduct, when she complained to the Consumer Protection Division last summer that this operation had taken almost $100 from her checking account for a membership she had never intentionally enrolled in,” said Attorney General Tom Miller. “Adding insult to injury, the unauthorized withdrawal caused her account to be overdrawn, resulting in overdraft fees. We’ve seen far too many similar abuses among membership buying clubs, and were grateful to the consumer for bringing this latest one to our attention.”
Miller said that enrollments in the “SavingPays” club occurred both online and over the phone. Online enrollments were often associated with a consumer’s visit to a website that offered to line up loans. The loan application was blurred with an unrelated membership enrollment, and Platinum used checking account information provided in a loan application to withdraw membership charges directly from the consumer’s bank account.
Once enrolled in SavingPays, Platinum charged consumers an initial fee of $99.49, followed by monthly $14 charges until the consumer contacted the company to cancel. Membership in SavingPays purported to provide discounts on shopping, dining, and entertainment.
Miller said that consumers who think they may be due a refund don’t need to contact his office. The Consumer Protection Division has obtained a customer list and will contact affected Iowans about the refund process.
“It is becoming more and more common that consumers are unwittingly charged membership fees as a result of an unrelated transaction,” Miller said. “We do what we can to make these enrollments more transparent and to prevent unauthorized charges, but consumers – like the Iowan who complained in this case – are the first line of defense.”
“Free Trial Offer” & Buying Club Tips
- Be wary of trial offers, “free trial” offers, and membership offers. Get the details and ask questions. Will you be billed automatically if you don’t cancel? By when must you cancel? How do you cancel? Will you receive a mail notice? Remember, they already may have your bank or credit card number to charge you.
- Examine your credit card bills every month, your checking account and debit card statements, other financial accounts, and phone bills. Watch for unauthorized charges, and dispute them at once, in writing.
- Watch your mail and email for notices that you will be billed unless you cancel. These mailings may look like junk mail or spam.
- Beware of cashing a check that comes in the mail with a “free trial offer.” The fine print may obligate you to future payments.
For more information or to file a complaint, contact the Attorney General’s Consumer Protection Division through the Attorney General’s website at www.IowaAttorneyGeneral.gov or email directly to firstname.lastname@example.org. Consumers can also call the Consumer Protection Division at 515-281-5926, or outside the Des Moines area, toll free, at 1-888-777-4590.
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