Citibank Settlement Sets Clearer Standards for Membership Services

摘要

The settlement agreement is significant not only because it sets forth the types of disclosures which attorneys general believe are essential to the marketing of club membership services, but also because it seeks to regulate the manner in which banks may structure relationships with marketing partners. The marketing of club membership services was dealt another blow by state attorneys general, who, as part of a 27-state action, extracted a $1.6-million settlement from Citibank. The action arose out of Citibank's arrangements with third-party marketers who were permitted to market to Citibank's customers and whose purchases were automatically billed by Citibank to the customer's account.