The payment services of Active Network were used by organizations, including the YMCA, to register consumers for events, like 5K runs, that sought to raise money for camps, cancer research, animal rescues and special needs children, among other causes, the CFPB said in the release. In the process of signing up for those events, Active Network used deception and unlawful marketing to funnel consumers into membership with its “discount club” Active Advantage, the CFPB said.
Atlanta-based Global Payments referred a request for comment to Active Network. A spokesperson for that company provided this comment by email: The “lawsuit by the CFPB against Active Network regarding a single product is frivolous and without merit.” Active Advantage “has been reviewed by multiple federal and state regulators, including the Federal Trade Commission,” and it has “nothing to do with the provision of consumer financial services, making the CFPB’s action outside the scope of the agency’s authority.”
That automatic trial membership, with an annual fee of $89.95, gave consumers 30 days to cancel the membership, leading to enrollment for many, according to the CFPB release. Ultimately, the membership didn’t provide the value that Active Network suggested, and the company increased the fee without notifying consumers, the CFPB said.
Those tactics in use over the past decade, since July 2011, generated the $300 million for Active Network, but only provided a fraction of that in benefits for consumers, the agency said.