$21 Million Settlement for Consumers Duped into Buying Subscriptions from Online Consumer Background Report Provider

Lori Kalani, Bernard Nash
Cozen O'Connor
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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.
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