Classmates Inc. and Florists’ Transworld Delivery have agreed to an $11 million settlement with 22 states, including Illinois, following allegations of unfair and deceptive marketing, Attorney General Lisa Madigan announced Tuesday.
Madigan and the attorney generals of 21 other states alleged Classmates, a social networking service that connects members with former classmates, and FTD, a flower delivery company, shared consumers’ personal information, including credit card account numbers, to allow third parties to bill them for advertised offers they may not have wanted.
“These companies’ practices were deceptive,” Madigan said in a statement. “After customers made a purchase, they were also charged for goods and services they never requested or wanted.”
The third-party marketers offered programs such as discount buying clubs and travel reward programs, often immediately after a customer completed an online transaction with Classmates of FTD, and if a customer didn’t cancel the advertised service or product delivery they were charged, Madigan claimed.
Classmates was also accused of failing to inform customers their subscriptions would automatically renew and making cancellation difficult.
In a statement, FTD said it "voluntarily eliminated the [third-party marketing] program over five years ago."
"FTD is confident that if the matter had been litigated it would have prevailed, but to avoid the substantial burden and expense of litigation, it has elected to resolve this matter consensually," the statement read.
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Classmates and FTD denied any wrongdoing but agreed to pay $8 million, and Classmates will establish a $3 million restitution fund to provide refunds to consumers whose subscriptions were renewed without authorization or who had trouble cancelling subscriptions.
Illinois’ share of the $8 million is $487,775.35.
Those seeking refunds from Classmates have 90 days from May 25 to call Madigan’s Consumer Fraud Hotline.
The numbers are:
Chicago: 1-800-386-5438
Springfield: 1-800-243-0618
Carbondale: 1-800-243-0607
