In recent years, more than 9,500 Iowans unwittingly paid an annual $60 membership fee to a California-based online company. Now, The Active Network of San Diego has agreed to pay over $237,000 to Iowans who had been charged.
Iowa Attorney General‘s office spokesperson Geoff Greenwood says most Iowans were charged the fee after registering for a marathon, a 5K run, or other sporting events on the website Active.com. “This is a membership that the company claims gives you discounts for goods and services and they charge you about 60 dollars a year,” Greenwood says. “These charges started showing up on Iowans’ credit cards and bank account information. Some didn’t know (the charges) were there and others didn’t quite understand how they enrolled.”
About half of the 9,500 Iowans who paid at least one membership charge ended up challenging the charge and obtained a refund from The Active Network. Greenwood says the company was clearly being deceptive. “It was apparent these consumers didn’t realize that they were getting enrolled in this annual membership, didn’t want it, and wanted refunds,” Greenwood says.
The so-called “stealth enrollments” carried out by this California company are nothing new, Greenwood says, so Iowans need to protect themselves. “We’re seeing a lot of cases where Iowans are noticing charges on their credit cards. In many cases, they’re very small charges that add up monthly. In other cases, like this one, it’s a once a year charge,” Greenwood says.
“The way to figure out that you’re being charged for something like this is to check your credit card bill. It’s very important. Unfortunately, there are lots of folks who don’t check their bills and they will keep getting these charges every month or year.” In addition to the $237,167 payment for refunds, the agreement requires The Active Network to make a $15,000 payment to the State of Iowa for consumer fraud enforcement.
“Free Trial Offer” & Buying Club Tips (from Iowa Attorney General’s office)
· 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.