Tuesday, May 26, 2015

Classmates Pays $11M To Settle Deceptive Marketing, Billing Allegations

Classmates, the online website which is part of Woodland Hills-based United Online, has agreed to pay $11.0M to settle allegations of deceptive marketing and billing by the company--an investigation which has been running since 2010. The settlement was announced Tuesday by a group of 21 attorney generals. United Online and spinout FTD will pay $8M to the states involved in the settlement, with $5.18M paid by Classmates and $2.82M to be paid by FTD; the companies also said Classmates will create a $3M restitution program covering consumers. Classmates had been accused of deceptive marketing and billing practices, in particular, signing up users for third party, auto-renewed, subscription services without those consumers' clearly understanding what they were signing up for.

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