$21 Million Settlement for Consumers Duped into Buying Subscriptions from Online Consumer Background Report Provider
Dec 23, 2021
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The FTC and the U.S. DOJ reached a settlement with online consumer background report provider MyLife.com Inc. and its founder and CEO, Jeffrey Tinsley, to resolve allegations that MyLife used misleading tactics to sell difficult-to-cancel subscriptions to consumers in violation of the FTC Act, Fair Credit Reporting Act, the Restore Online Shoppers’ Confidence Act, and the Telemarketing Sales Rule. The complaint alleged that the MyLife.com website showed search results that implied, often falsely, the subject of the report may have a criminal record, and that these misleading statements led consumers to purchase a MyLife subscription in order to view the report. The complaint also alleged that MyLife used misleading billing practices, including failing to clearly disclose upfront charges and automatic subscription renewals. Under the terms of the stipulated order , MyLife is subject to a $28.9 million judgment in consumer redress, but will only pay $16 million due to the company’s inability to pay the full amount, and Tinsley will personally pay $5 million. In addition, MyLife and Tinsley are permanently banned from marketing products with a negative option feature, and MyLife is required to implement a monitoring program to ensure that it does not make misleading or unsubstantiated statements to market its background reports, among other things.