Attorneys general from twenty-two states today announced that Classmates, Inc. which runs the website classmates.com, and Florists Transworld Delivery, Inc. and FTD.com, Inc. (collectively, “FTD”) have agreed to settle allegations that the companies were involved in misleading, unfair, and deceptive trade practices. Although FTD and Classmates did not admit to wrongdoing, they agreed to pay $11 million under the settlement.
The attorneys general alleged that FTD and Classmates, which were affiliated until 2013, entered into relationships with third-party marketers, such as travel rewards programs and discount clubs. The third-party marketers then used negative opt-out marketing schemes through which consumers would be enrolled in these programs and billed for associated charges unless they affirmatively opted out. Additionally, the attorneys general alleged that FTD and Classmates shared consumer data, including credit card information, so that the consumers could be billed for the charges. Such data-sharing is impermissible under the Restore Online Shoppers Confidence Act of 2010.
Participants in the settlement include the attorneys general of Alabama, Alaska, Delaware, Florida, Idaho, Illinois, Kansas, Maine, Maryland, Michigan, Nebraska, New Jersey, New Mexico, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Texas, Vermont, Washington, and Wisconsin.