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Vertrue, a Norwalk company that billed itself locally as a good neighbor and supporter of the arts, has been found guilty of deceptive and unfair practices by an Iowa court. The fraud involved nearly half a million Iowa residents and $36 million in revenue. "Our jaws dropped, too, when we discovered the numbers," said Iowa Attorney General Tom Miller, who filed the lawsuit.
Vertrue, an Internet marketing company, sold buying club "memberships" costing $9.95 to $19.95 a month, with charges usually being made to consumers' credit cards or bank accounts. The memberships entitled consumers to discounts on books, music, and other products. But according to Miller, who sued Vertrue under Iowa's Consumer Fraud Act, the company enrolled consumers and charged their credit cards without consent. "We alleged Vertrue's illegal sales practices resulted in a vast number of Iowans' credit cards being charged, sometimes repeatedly, for memberships most of the Iowans didn't even know they had and never used."
Polk County District Court Judge Robert A. Hutchison ruled Vertrue used deceptive and unfair practices to enroll Iowans in 863,970 buying club memberships over 20years. Iowa's attorney general will seek restitution for consumers and penalties for the company.
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