Classmates has agreed to pay $11 million after 22 attorneys general alleged that the Seattle-based company engaged in deceptive billing and marketing practices.
The company was being investigated for its partnerships with third-party groups, which automatically charged consumers for services such as discount buying clubs and travel rewards programs.
The attorneys general claimed that users of Classmates and FTD.com — the floral delivery service once owned by Classmates.com parent company United Online — were automatically enrolled in the third-party programs during the sign-up process.
Washington Attorney General Bob Ferguson, along with 21 other attorneys general, reported the payout for users of Classmates and FTD.com.
“Consumers have a right to expect companies to clearly disclose the terms of their services,” Ferguson said in a release. “When a business fails to do that, my office will hold them accountable. I will not tolerate deceptive business practices.”
Compensation is available for customers who were charged without authorization, after cancellation or after misrepresenting potential costs. Washington state consumers can file a claim with the attorney general.
The Seattle-based Classmates recently moved into a new building and has added yearbooks and user-generated content to the site, along with a free tier. It was founded in 1995 by a former Boeing engineer and was purchased by United Online in 2004.