Woodkirk Stone
The online information reporting company MyLife.com Inc. (MyLife) and its founder and CEO, Jeffrey Tinsley, have agreed to pay $ 21 million in consumer redress and an injunction that would require them to comply with the Federal Trade Commission Act (FTC Act), Telemarketing Sales Rule (TSR), Restore Online Shoppers Confidence Act (ROSCA) and Fair Credit Reporting Act (FCRA) in all current and future business activities. The deal follows an order made by a federal district court in the Central District of California on Oct. 19, granting partial summary judgment to the government. This order found that MyLife had violated the FTC, TSR and ROSCA law; that MyLife was responsible for $ 33.9 million in consumer redress; and that an injunction would be appropriate to prevent further violations of these laws.
In the complaint filed on July 27, 2020, the government alleged that the defendants sold subscriptions to their website‘s consumer history reporting service on the basis, often incorrectly, that individuals had criminal records that did not could be accessed only by purchasing a subscription. According to the complaint, the defendants also made false statements or failed to disclose the material terms of these subscriptions, including the fact that the payment for several months was billed in advance, that the subscriptions would be automatically renewed and that the subscription or auto-renewal could only be canceled by calling a customer. service center that prevented or discouraged cancellations. The complaint also alleged that the defendants were violating the FCRA because they encouraged the use of their basic reports and knew that consumers were using the reports, for employment decisions, tenant selection or other prohibited purposes. , but they did not have reasonable procedures to ensure maximum accuracy in their substantive reports. or to determine who was using them and why. For all of the claims, the government sought civil penalties, consumer redress and an injunction from both MyLife and Tinsley.
“The Department of Justice and the FTC are working hard to protect consumers from deceptive sales practices like the ones at issue here,†said Acting Deputy Attorney General Brian M. Boynton of the Civil Division of the Department of Justice. “This is a victory for consumers, who should not be subjected to misleading claims and marketing tactics. “
“MyLife has lured consumers to hard-to-cancel negative option subscriptions over concerns that MyLife’s reports could damage their reputation or their ability to find employment or housing,†said Director Samuel Levine of the Office of the consumer protection from the FTC. “These extortion tactics broke the law, and MyLife and its CEO were banned from negative option marketing and ordered to clean up their practices.”
After filing the complaint, the government won a summary judgment motion. In particular, the court found that MyLife had engaged in deceptive acts in violation of the FTC law by deceiving consumers into believing that millions of people had a criminal record or an arrest, even though MyLife lacked it. information to support these claims. The court also found that MyLife violated the TSR by engaging in sales calls with consumers who did not disclose the terms and conditions of a MyLife subscription, such as its auto-renew feature. The court further found that MyLife violated ROSCA by failing to provide a simple cancellation mechanism for consumers whose subscriptions renew automatically. The court also granted the government’s consumer redress claim, finding that a total redress of $ 33.9 million was appropriate for MyLife’s TSR and ROSCA violations.
Following the court’s summary judgment, MyLife and Tinsley agreed to today’s stipulated court order, which places significant bans on them and any other current or future companies they own or control. The provisions prevent MyLife and Tinsley from distorting consumers’ legal backgrounds and expressly prohibits them from directly or implicitly declaring that a traffic citation is a criminal or arrest record. The order also prohibits MyLife and Tinsley from using a negative option auto-renew feature in their current and future business operations. The order includes 20-year compliance and reporting requirements.
The order also includes a total judgment of $ 33.9 million against MyLife and Tinsley, representing the full amount of relief sought by the government and deemed appropriate by the court in summary judgment. Tinsley will personally pay $ 5 million of this, with MyLife responsible for the rest. The amount MyLife pays will be suspended at $ 16 million, with the suspension lifted, if the court finds that any of the defendants have materially misrepresented their financial situation or if MyLife does not make the required payments.
The case was handled by lawyers from the Consumer Protection Division of the Civil Division, including Patrick Runkle and Claude Scott, senior litigation lawyers, trial lawyers Zachary Dietert, Rachel Baron and Zachary Cowan, and Deputy Director Lisa Hsiao, working with Andrea Arias, Jamie Elliott Hine, Whitney Moore and Robert Schoshinski of the FTC Privacy and Identity Protection Division.