A.G. Schneiderman Obtains Settlement With Company That Tricked Consumers Into Signing Up For Credit Monitoring And Discount Programs They Never Ordered

Profinity Will Pay $250,000 for Consumer Restitution, Penalties, Fees, And Costs And Will Reform Online Marketing Practices

NEW YORK – Attorney General Eric T. Schneiderman today announced that his office has obtained a settlement with Florida-based Profinity, LLC and Family Savings, LLC (collectively, “Profinity”), for tricking consumers into enrolling in a variety of membership programs without customer knowledge. Under the settlement, Profinity will provide total refunds of $150,000 to certain New York consumers who were charged unauthorized fees and will pay $100,000 in penalties, costs, and fees.  Profinity has also agreed to reform its online marketing practices.

“Consumers, some of whom were simply seeking jobs or rental apartments online, were tricked into paying for services with monthly fees that they did not want or need,” said Attorney General Schneiderman. “My office will aggressively investigate companies that scam New Yorkers out of their hard earned money through misleading Internet and phone offers.”

The Attorney General’s investigation found that Profinity deceptively marketed a variety of membership programs to consumers for a monthly fee.  These programs purported to provide benefits such as grocery coupons, retail discounts, restaurant vouchers, magazine subscriptions, roadside assistance, legal referral services, tech support, identity theft protection, credit scores, and credit monitoring services.   Consumers were frequently tricked into signing up for one or more of Profinity’s fee-based membership programs through misleading telemarketing calls promising “free gifts” and “risk free” trials. 

Other consumers, who had purchased products from third-party companies, were misled into enrolling in Profinity’s membership programs during verification calls with the company’s representatives. On these calls, the company misled consumers into believing that the person they were speaking to was a representative of the original company from which consumers purchased products and that the purpose of the call was to verify their purchases.   Instead, consumers were tricked into providing their credit or debit card information and then enrolled in one of Profinity’s fee-based membership programs.

In many cases, consumers were duped into enrolling in Profinity’s credit monitoring program by responding to deceptive advertisements placed by Profinity’s affiliate marketers for fictitious jobs, apartments, and government benefits on third-party websites such as Craigslist, which asked consumers to obtain their “free” credit score by clicking on an embedded hyperlink that led to Profinity’s enrollment page.  Between December 15, 2011 and October 9, 2012, Profinity attempted to “upsell” consumers who enrolled in its credit monitoring program into paying an additional $29.95 to access their credit scores and reports from the three national credit reporting agencies.  The two onscreen options for consumers to either accept or decline this offer were labeled in a confusing manner.  Many consumers mistakenly chose the more prominent, brightly colored “Get All 3 Reports & Scores” upsell option and were immediately charged $29.95.  Only consumers who chose the less prominent, “No Thanks.  Proceed to my Member Benefits” option received their free credit score and a free credit report. 

Consumers often incurred monthly fees for several months without realizing that they had been enrolled in one of Profinity’s membership programs.  Even after consumers noticed these charges on their credit or debit card statements, many consumers experienced difficulties cancelling these fee-based membership programs when they contacted Profinity.  With respect to refunds, Profinity instructed its representatives not to “give them away like candy.” 

The monthly fees for joining Profinity’s discount or credit monitoring programs were buried in fine print and inconspicuous text on the webpage so that most consumers were not aware that by accepting the “free” trial they were being enrolled in Profinity’s fee-based membership programs.  These programs may have offered actual discounts and benefits but few “members” actually utilized them, presumably because they did not know they were enrolled in the programs.

In addition to paying $150,000 for consumer restitution and $100,000 in penalties, fees, and costs, Profinity has agreed to several important reforms of its current practices in New York.  These include:

  • Reforming its online marketing practices to ensure consumers understand that they are enrolling in a Profinity membership program;
  • Obtaining the consumer’s express informed consent prior to billing any consumer for a Profinity membership program;
  • Ensuring that all upsell offers are clearly labeled and are of equal prominence so that consumers are not confused and can easily accept or decline the offer;
  • Improving its customer service policies to make it easier to consumers to stop recurring charges and cancel their enrollment.

New York consumers who enrolled in Profinity’s Pro Credit membership program between December 15, 2011 and October 9, 2012 and paid $29.95 for their credit scores and reports from the three national credit reporting agencies will receive a full refund.

In addition, New York consumers who were enrolled in Profinity’s Family Savings, Pro Save & Protect, or Pro Credit membership programs since April 2010, or who purchased an upsell to Profinity’s Total Identity Protection membership program may submit a written complaint to the NYAG within the next six (6) months to be considered for a refund.

Consumers who believe they may be entitled to a refund should notify the Attorney General’s office.  Consumers can file a complaint online at www.ag.ny.gov.  Consumers can also call the Attorney General’s consumer helpline at 1-800-771-7755.

This matter was handled by Assistant Attorney General Melissa O’Neill, Deputy Bureau Chief Laura J. Levine, and Bureau Chief Jane M. Azia, all of the Consumer Frauds and Protection Bureau, and Executive Deputy Attorney General for Economic Justice Karla G. Sanchez.