Antitrust Law Daily Wrap Up, ADVERTISING NEWS: FTC, state attorneys general halt “free” credit score scheme, (Nov 20, 2014)

By Greg Hammond, J.D.

The FTC, along with the Illinois and Ohio attorneys general, have reached a $22 million settlement with Texas-based technology firms, over allegations the companies falsely claimed to offer free credit scores to consumers. In a similar suit, Texas Attorney General Greg Abbott announced a $400,000 agreed judgment with the technology firms, settling claims that the companies violated the Texas Deceptive Trade Practices Act (FTC v. One Technologies, LP, File No. 132 3021, Case No. 3:14-cv-05066) and (Texas v. One Technologies, LP, Case No. D-1-GN-14-004814).

One Technologies, LP, One Technologies Management, LLC, and One Technologies Capital, LLP are Dallas-based technology companies that allegedly used deceptive marketing tactics to enroll consumers in their credit monitoring programs. According to both the FTC complaint and Texas petition for injunction, One Technologies offered consumers “free” online access to their credit scores, but failed to adequately disclose that consumers would be enrolling in One Technologies’ credit monitoring program, called ScoreSense. If consumers failed to cancel the service during a 7-day trial period, the companies would charge consumers a monthly fee of $29.95. The Commission alleged that One Technologies caused tens of millions of dollars in injury to consumers, and that at least 210,000 consumers have complained about the companies’ business practices.

In addition to paying $22 million to the FTC, pursuant to the settlement agreement, One Technologies is prohibited from misrepresenting: the cost of a good or service; that a good or service is free; the purpose for which consumers’ payment information will be used; the timing or manner of any charge or bill; the length of any trial period; or that a transaction has been authorized by a consumer. In addition, the companies must inform consumers of the name and description of their good or service, the length of any trial period, and the mechanism to stop any recurring charges, before consumers consent to any purchase. The companies must also obtain express informed consent prior to using billing information to obtain payment from a consumer. According to the Commission, the $22 million will be used for consumer refunds.

The Agreed Final Judgment reached with Texas imposes nearly identical restrictions on One Technologies. However, $250,000 of the settlement funds will be remitted to the General Revenue or Supreme Court Judicial Fund, and the remaining funds will reimburse Texas’ legal fees.

“We are pleased to be part of this settlement, which provides substantial relief for consumers,” stated Ohio Attorney General Mike DeWine. “Not only will the business pay millions to reimburse consumers, it also will significantly change the way it markets its services.”

Companies: One Technologies, LP; One Technologies Management, LLC; One Technologies capital, LLP

News: Advertising ConsumerProtection StateUnfairTradePractices FederalTradeCommissionNews