Vermont Attorney General William Sorrell has announced that he has settled claims against Stonebridge Benefit Services, Inc., a company that markets discount membership programs, and J.C. Penney Company, Inc., from which Stonebridge obtained consumer credit card information.
Texas-based Stonebridge sells membership programs that provide discounts for various goods and services. Customers’ credit cards are subject to monthly charges unless they cancel their memberships.
The Attorney General’s claims were brought under Vermont’s Discount Membership Program Act. Passed in 2012, the Act, which was intended to ensure that consumers understand the terms of discount programs, provides that consumers may only be enrolled in discount programs if they fully disclose their credit card information to the program seller, are reminded regularly of the program charges, and sign up again for the service every 18 months.
The Attorney General claimed that Stonebridge violated the Act by failing to comply with these provisions. The Attorney General also alleged that J.C. Penney provided credit card numbers to Stonebridge for cardholders who had not provided full credit card information in order to enroll in the program.
As part of the settlement, Stonebridge will pay $175,000 to the State of Vermont and $227,000 to consumers who complain in writing that they did not authorize charges by Stonebridge to their J.C. Penney credit cards.
The settlement underscores the importance of keeping up to date with statutory and regulatory developments in each state in which a company does business.