State prosecutors charge a Texas company has bilked thousands of Iowans in a “buying club membership” scheme. The Iowa Attorney General in the lawsuit against Stonebridge Benefit Services of Plano, Texas alleges the company used “unfair and deceptive sales tactics” to charge Iowans a monthly fee for memberships that were “unwanted and unused.”
According to the attorney general, the company signed up as many as 50-thousand Iowans for their buying clubs and those Iowans paid about four million dollars in monthly fees. The company offered free gift cards or “cash back” offers to people who bought items online and to people who watched an infomercial and bought a product over the phone.
Prosecutors say many were then enrolled in the monthly “buying club” without their knowledge or consent. A district court judge ruled in March that a Connecticut firm that used some of the same tactics had to pay $28-million for deceiving nearly half-a-million Iowans in a similar buying-club scheme.
That company has appealed the verdict.