A spokesman for Iowa Attorney General Tom Miller says Friday’s Iowa Supreme Court ruling upholding penalties against a Delaware marketing company is a key victory in the fight against consumer fraud. A-G spokesman, Geoff Greenwood, says the Vertrue Incorporated ruling backed the case the state presented.
“This is an outstanding ruling, it’s a decisive ruling and it’s also helpful for older Iowans when companies try to take advantage of them,” Greenwood says. “So we think this is a vindication of our state’s consumer protection laws as well as our efforts to enforce them.” The Supreme Court upheld the judgment that ordered Vertrue to pay $25-million in restitution, $725,000 in court costs, and upped the civil penalty by $180,000 to $3-million.
The company took orders for discount goods and services using what are called negative options. That’s where you sign up for a free trial for a service and you will keep getting billed for the service once the trial expires unless you specifically ask that it be stopped. Greenwood says the state proved the company was using illegal practices.
“There was documentation about what they told people who picked up their phones or people who ordered something and how they collected this money and then eventually how it ended up on their credit card bills. We felt that we proved this case, we won at the district court level, and we won even bigger through the Iowa Supreme Court ruling,” Greenwood says.
Greenwood says there are still some possible legal steps remaining before anyone gets a refund. “The next step is really in the hands of the company, the company has to decide if it wants to pursue this further,” Greenwood explains. He says the company could ask the Iowa Supreme Court to reconsider its ruling or it could appeal to the U.S. Supreme Court.
Greenwood says the company has gone bankrupt, but state acquired a $32-million appeal bond in the case, which means there is money available once the legal avenues have been exhausted.