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Supreme Court punishes Connecticut marketing company for ripping of Iowans

Iowa Supreme Court
Iowa Supreme Court

DES MOINES – In an Iowa Supreme Court ruling Friday, a Connecticut marketing company must pay millions in restitution for selling Iowans club memberships most of them ended up not wanting.

The court ruled that Vertrue Inc. must pay over $40 million is restitution and fines for enrolling 863,970 Iowans since 1989 in membership programs that many of them did not even realize they were enrolled in, court documents show.

The court stated that persons over the age of sixty-five were among the most likely to enroll in the program and among the least likely to use the program benefits. The court state that “the weight of the evidence suggests that these persons never accessed the purported membership benefits because they did not know they were deceived into enrolling.”

“The elderly were substantially more vulnerable to Vertrue’s indecipherable, rapid-fire telemarketing pitches.”

Vertrue consistently offered consumers free trial memberships with a negative option—meaning consumers would be charged the full price of the membership if they failed to call and cancel within the designated trial period. Normally, once individuals were enrolled in one of Vertrue’s membership programs, their credit cards or bank accounts were charged on a monthly basis until they contacted Vertrue and canceled the membership.

In 1999, the Iowa Attorney General’s Office began receiving a high volume of complaints from Iowans regarding Vertrue’s marketing and business practices and an investigation was launched, culminating in a lawsuit launched in 2006 against Vertrue.

 

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