Preacquired account marketing means charging you for things you don’t buy. These are the Free trial membership!!! offers you get in the mail or see in magazines, or the $9.99 text messages that keep coming if you don’t text back a special code to stop them. Preacquired account marketing companies play fast and loose with what it means to give consent to be billed for a service.
A recent Iowa judgment against a major perpetrator of these scams may have other companies thinking twice. Iowa district court judge Robert Hutchison ordered Vertrue to pay about $33.5 million for violating the the Iowa Buying Club Membership Law and the Iowa Consumer Fraud Act.
That’s a huge victory, but let’s put it in context. Vertrue’s website claims that its revenues were $800 million just a few years ago. That was before the economy tanked, and we don’t know how much of that was profit, but it sounds like Vertrue can probably absorb this loss. Fortunately, it cannot keep up with business as usual in Iowa; the judgment also includes an injunction prohibiting Verture from further violations of the law.