For Immediate Release
Media Contact: Kriss Bivens Cloyd
(208) 334-4119

Date: May 26, 2015

Attorney General Announces $11 Million Settlement with Classmates and FTD

(Boise) - Attorney General Lawrence Wasden has reached an $11 million settlement with Classmates, Inc. (Classmates), Florists’ Transworld Delivery, Inc., and Inc. (“FTD”) to resolve allegations that the companies engaged in misleading advertising and billing practices.

Wasden joined attorneys general from 21 other states in resolving allegations that the companies worked with third party companies that engaged in negative option marketing practices. Companies that engage in negative option sales sign consumers up for a good or service unless they specifically decline or reject the offer. The third-party marketers offered discount buying clubs and travel rewards programs, often immediately after the consumer made an online purchase with Classmates or FTD. Classmates and FTD would also share consumers’ personal information, including credit card account numbers without the persons’ knowledge so the consumer could be billed for these offers if they did not cancel.

“Idaho consumers should not be forced to pay for goods or services they did not request or authorize,” Wasden said. 

Idaho settled similar allegations against two of Classmates’ and FTD’s marketing partners – Webloyalty, Inc. and Affinion Corp. in October of 2013. That settlement included restitution in excess of $19 million.

Terms of the settlement agreement prohibit marketing partners of Classmates or FTD, from:

  • Misrepresenting the reason for requesting a consumer’s account information;
  • Using FTD and Classmates’ names or logos in the title of a membership program; and
  • Stating an offer is “free” or “risk free” if the offered program will convert to a paid subscription.

Classmates has also agreed to make significant changes to its business practices, including more clearly disclosing to consumers that their Classmates subscriptions will automatically renew and making it easier for consumers to cancel their subscriptions.

Classmates and FTD agreed to settle with the Attorneys General for $8 million without admitting any wrongdoing. Additionally, Classmates is establishing a $3 million restitution fund to provide refunds to consumers who were enrolled into Classmates’ subscription service without authorization or who experienced difficulty when trying to cancel their Classmates subscriptions.

Consumers seeking refunds from Classmates should complete a consumer complaint form and send it, with documentation of the loss, to the Attorney General’s Consumer Protection Division. Complaint forms are available online at the Attorney General’s website.

The Attorney General’s Office will recover more than $72,000 from FTD and over $132,000 from Classmates for its costs and fees.

The settlement is subject to the approval of the Fourth District Court.

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