Signature/Financial Marketing Inc. will pay $950,000 to settle deception charges connected with its telemarketing and direct mail campaign to sell credit card protection plans, the Florida attorney general's office said yesterday.
The Delaware-based firm did not admit wrongdoing as part of the settlement. The Florida attorney general's office accused Signature/Financial Marketing of selling protection against fraudulent use of credit cards to consumers for $144 a year through its subsidiary, Credit Card Sentinel Inc.
Consumers received a free trial but did not get adequate notice that they would be charged automatically once the trial period expired, according to the charges. Furthermore, some consumers who received the offer but did not accept the free trial received charges anyway, the state attorney general said.
The state also charged the firm with overstating the potential liability of consumers in cases of credit card fraud. Consumers are responsible for only up to $50 of the charges when their cards are used fraudulently.
Signature/Financial's settlement payment includes a $750,000 donation to the Stetson Law School Elder Law Center to educate seniors about consumer fraud, while the rest pays for the state's investigative costs. In addition, the firm agreed to issue refunds to consumers who subscribed to its credit card-protection service.