Louisiana Attorney General Liz Murrill
BATON ROUTE – Louisiana Attorney General Liz Murrill has announced a $1 million multistate settlement with an online clothing retailer to resolve deceptive marketing claims.
According to Murrill’s office, TFG Holding Inc. offers consumers discounted pricing if they enroll in the company’s VIP Membership Program. Once enrolled in the program, consumers are charged $49.95 a month unless consumers make a purchase from the company before the sixth day of each month or log into their membership accounts to “skip” the charge.
The monthly charges accrue in the consumers’ accounts in the form of store credits, which can be used on future purchases, according to the AG’s office.
“This settlement shows our continued efforts to ensure that businesses conduct themselves in the right manner,” Murrill said in an October 29 statement announcing the settlement. “I will continue to fight for all Louisiana citizens who have been impacted by companies who engage in unfair and deceptive trade practices.”
Louisiana consumers are expected to receive $63,000, and the Louisiana Department of Justice will receive approximately $15,000 for costs of the investigation.
The settlement says TFG Holding violated state consumer protection laws in multiple ways, including by misrepresenting the price consumers could expect to pay for products advertised on the company’s websites, automatically enrolling consumers without their consent into a Membership Program that included the recurring charge without consumers’ consent, implementing and maintaining cancellation policies and practices that frustrated consumers’ ability to cancel the VIP Membership Programs into which they were enrolled and failing to adequately disclose material facts to consumers including that by purchasing products they will be enrolled in the VIP Membership Program.
Under the terms of the settlement, TFG Holding is required to comply with all applicable laws and regulations, clearly and conspicuously disclose the material terms of its VIP Membership Program, refrain from representing its offers or sales of its products as time sensitive when they are not, obtain the consumer’s express informed consent prior to enrolling any consumer in the VIP Membership Program, provide a simple online mechanism for consumers to cancel their VIP Membership Program and promptly accept and process any request by a consumer to cancel their VIP Membership Program and stop the billing and collecting of payments for any recurring charge; promptly honor consumer cancellation requests and cease any further billing; provide all consumers the opportunity to request and obtain a refund of any recurring charge balance accrued within the preceding year and cease the billing of recurring charges to any consumer who enrolled in the VIP Membership Program prior to May 31, 2016, unless the consumer previously skipped a payment, redeemed a credit, received a refund or made an additional purchase.
As part of the settlement, the company will also be required to provide automatic restitution to all consumers who enrolled in a VIP Membership Program prior to May 31, 2016, and only made an initial purchase but no subsequent purchases and never skipped a payment; pay restitution to consumers who have an existing eligible complaint against the company that has not been resolved, and to consumers who file a new eligible written complaint with the company or the Attorney General’s office within 90 days of the Effective Date of the settlement that was not previously resolved; and pay $1 million to the jurisdictions involved in the investigation to cover the costs of investigation or to be used for future consumer protection purposes.
Louisiana is joined in the settlement by the Attorneys General of Alaska, Arkansas, Colorado, Connecticut, District of Columbia, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Washington and Wisconsin.
