400,000 Iowans eligible for buying club refunds

IOWA CITY – More than 400,000 Iowa residents including many seniors who were tricked into signing up for buying club memberships will be eligible for refunds ranging from $6 to more than $1,000, under a landmark consumer fraud settlement announced Tuesday.

Refund notices were mailed Monday to people who unknowingly paid for memberships with Connecticut-based Vertrue Inc. and two other buying clubs over the last 25 years, Iowa Attorney General Tom Miller said. In all, they will be eligible for $40 million in refunds that will be paid out between October and December, he said.

The number of people who enrolled was equivalent to 13 percent of Iowa’s 3.1 million population, although some had multiple memberships to programs in which they could buy discounted goods or services. The vast majority of the memberships were never used.

Miller said the victims were deceived into paying recurring monthly charges ranging from $9 to $30 for memberships that they did not want through misleading telephone, mailing and Internet solicitations. Many of the pitches asked them to sign up for a “free trial” or receive a gift card after they had made other, legitimate transactions. Mailings informing customers about their memberships were designed to look like junk mail and were often thrown away. Some customers didn’t catch the small charges on their cards, he said.